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Intersect (XENT) Q2 Loss Wider Than Estimates, Revenues Miss

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Intersect ENT Inc. (XENT - Free Report) reported second-quarter 2019 loss per share of 36 cents, wider than the Zacks Consensus Estimate of a loss of 34 cents. The reported loss was also a massive 157% wider than the year-ago loss of 14 cents.

Reported revenues in the second quarter grew 1.5% year over year to $26.7 million but missed the Zacks Consensus Estimate by 1.1%. The upside can be attributed to higher uptake of the SINUVA Sinus Implant. SINUVA accounted for around 4% of second-quarter 2019 revenues.

Margins

Cost of sales during the reported quarter was $5 million, down 9.2% year over year. Gross margin came in at 81.1%, reflecting a 221-basis point (bps) expansion year over year.

Selling, general and administrative expenses were up 31.4% to $27.6 million in the quarter under review. Research and development expenses were $6 million, up 38.1% year over year. The company reported operating loss of $12 million as compared with the year-ago operating loss of $4.6 million.

Intersect ENT, Inc. Price, Consensus and EPS Surprise

 

Intersect ENT, Inc. Price, Consensus and EPS Surprise

Intersect ENT, Inc. price-consensus-eps-surprise-chart | Intersect ENT, Inc. Quote

Cash Position

Intersect ENT exited the second quarter of 2019 with cash, cash equivalents and short-term investments of $93.5 million compared with $97.6 million at the end of the first quarter.

2019 Guidance

Intersect ENT slashed its 2019 revenue view to $108.5 million from the prior $113-$117 million. The Zacks Consensus Estimate for the metric is pegged at $114.7 million, which is above the provided guidance.

The company’s 2019 outlook for the gross margin has been reaffirmed at 80-81%.

Our Take

Intersect ENT ended the second quarter on a dismal note. The updated guidance for 2019 also lacks luster.

However, we are upbeat about the company's revenue growth on increased adoption of the SINUVA Sinus Implant. Management is optimistic that renewed focus on PROPEL market development should enhance SINUVA product access. The preliminary decision by CMS to assign a J code and the solid potential of SINUVA buoy optimism as well.

Zacks Rank & Key Picks

Intersect ENT has a Zacks Rank #4 (Sell).

A few better-ranked companies, which posted solid results this earnings season, are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Baxter delivered second-quarter 2019 adjusted earnings per share (EPS) of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion beat the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company holds a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank of 2.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Revenues were $1.1 billion, surpassing the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1.

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