Orthofix Medical Inc . OFIX reported second-quarter 2019 adjusted earnings per share (EPS) of 28 cents, down 33.3% year over year. The figure missed the Zacks Consensus Estimate by 30%. Reported loss per share in the quarter came in at 3 cents, showing a sharp year-over-year decline from the year-ago quarter’s EPS of 5 cents. Revenues in the second quarter came in at $115.9 million, up 3.9% year over year and up 5% at constant exchange rate or CER. The figure was almost in line with the Zacks Consensus Estimate. Segmental Analysis The company’s key operating segment Orthofix Spine comprises product lines like Bone Growth Therapies, Spinal Implants, Biologics and Orthofix Extremities. For the quarter under review, revenues from Bone Growth Therapies totaled $50.1 million, up 3.9% year over year both on a reported and CER basis.
Spinal implants raked in revenues of $23.2 million, down 2.7% (2% at CER). Biologics recorded revenues of $16.7 million, up 14.2%, both on a reported and CER basis. Revenues from Orthofix Extremities grossed $25.8 million, up 4% on a reported basis (8.5% at CER).
Margin Details In the second quarter of 2019, gross profit increased 1.5% year over year to $90 million. However, gross margin contracted 181 basis points (bps) to 77.7%. Adjusted operating profit declined 69.2% from the year-ago quarter to $2.3 million. The decline was led by a 7.9% year-over-year increase in operating expenses. As a result, operating margin contracted 463 bps to 1.95%. Operational Update Orthofix exited the second quarter of 2019 with cash equivalents of $52.1 million compared with $46.7 million in the preceding quarter. Year to date net cash from operating activities totaled $8.3 million, down 35.9% from the year-ago $13 million. Capital expenditures totaled $10.3 million in the first six months of 2019, up from $6.7 million in the year-ago period. Guidance for 2019 Orthofix kept the 2019 financial guidance unchanged. Adjusted EPS at the end of 2019 is projected in the band of $1.75-$1.82. The Zacks Consensus Estimate of $1.78 is within the guidance. Revenues are projected in the band of $472-$477 million. The Zacks Consensus Estimate of $472.8 million is just above the low end of the guidance. Our Take Orthofix ended the second quarter of 2019 on a mixed note. Barring Implants, all key operating segments witnessed year-over-year revenue growth. Though gross profit increased in the quarter, the contraction in gross and operating margin is concerning. On a positive note, the recent FDA approval of the M6-C Artificial Cervical disc buoys optimism. Zacks Rank and Key Picks
Orthofix currently carries a Zacks Rank #3 (Hold).
A few better-ranked companies which have come up with solid results this earnings season are Surmodics, Inc. (
SRDX Quick Quote SRDX - Free Report) , Baxter International Inc. BAX and Zimmer Biomet Holdings, Inc. ZBH.
Surmodics delivered third-quarter fiscal 2019 adjusted EPS of 15 cents which surpassed the Zacks Consensus Estimate by a whopping 200%. Revenues of $24.3 million exceeded the Zacks Consensus Estimate by 6.6%. The company carries a Zacks Rank of 1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here .
Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Revenues of $2.84 billion also beat the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company holds a Zacks Rank #2 (Buy).
Zimmer Biomet reported second-quarter 2019 adjusted EPS of $1.93, which beat the Zacks Consensus Estimate by a penny. Moreover, revenues totalled $1.99 billion, topping the Zacks Consensus Estimate of $1.98 billion by a slight margin. The company is also Zacks #2 Ranked.
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