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Inogen (INGN) Q2 Earnings Miss Estimates, 2019 View Lowered

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Inogen, Inc. (INGN - Free Report) reported second-quarter 2019 earnings per share (EPS) of 45 cents, which missed the Zacks Consensus Estimate of 50 cents. The bottom line also plunged 30.8% year over year.

Revenues of this Zacks Rank #4 (Sell) company came in at $101.1 million, missing the Zacks Consensus Estimate by 5.6%. On a year-over-year basis, the top line climbed 3.9%.

Segmental Details

Sales revenues amounted to $95.9 million in the quarter under review, up 4.2% on a year-over-year basis.

Rental revenues totaled $5.2 million, down 1%.

Inogen, Inc Price, Consensus and EPS Surprise

 

Inogen, Inc Price, Consensus and EPS Surprise

Inogen, Inc price-consensus-eps-surprise-chart | Inogen, Inc Quote

Revenues by Region and Category

Business-to-business revenues in the United States summed $29.7 million, down 10% on a year-over-year basis. Internationally, this segment recorded revenues of $22.6 million, up 8.7% and 14.7% at constant currency, on continued adoption by the company’s European partners.

Direct-to-consumer revenues rose 14% year over year to $43.6 million in the quarter under review on higher sales representative productivity.

Margins

In the quarter under review, gross profit was $50.2 million, up 3.6% year over year. Gross margin came in at 49.7%, down 10 basis points (bps).

Operating income was $12.1 million, down 13.4% year over year. Operating margin came in at 12% of net revenues, down a substantial 240 bps in the prior-year quarter.

Guidance Slashed

Inogen slashed its 2019 revenue guidance to $370-$375 million from the earlier $405-$415 million, calling for year-over-year growth of 3.3-4.7%. The Zacks Consensus Estimate for the same is pegged at $408.7 million, above the guided range. Per management, the company has slashed expectations for the direct-to-consumer sales channel, primarily because of a drop in sales headcount.

Additionally, third-quarter 2019 revenues are expected to decline on a year-over-year basis.

Inogen also cut its 2019 operating income guidance to $26-$28 million from the previous band of $42-$44 million.

Wrapping Up

Inogen ended the second quarter on a mixed note. Solid business-to-business international revenues buoy optimism. Apart from these, the company’s direct-to-consumer unit performed exceedingly well in the quarter. The company is also optimistic about international revenues, which witnessed solid growth in Europe during the second quarter.

On the flip side, Inogen’s rental revenues declined on a year-over-year basis in the second quarter. In fact, the company’s U.S. business-to-business revenues also deteriorated in the quarter. Moreover, operating margin contraction is worrisome. Inogen lowered its guidance for 2019, which is disheartening. The company also expects revenues in the third quarter to remain subdued.

Earnings of MedTech Majors at a Glance

A few top-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) , each carrying 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%. Its revenues of $3.65 billion surpassed the consensus estimate by 1.4%.

Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Its revenues of $2.84 billion outpaced the consensus estimate of $2.79 billion by 1.9%.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Its revenues of $1.1 billion surpassed the Zacks Consensus Estimate of $1.03 billion.

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