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Merit Medical (MMSI) Q3 Earnings & Revenues Miss Estimates
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Merit Medical Systems, Inc. (MMSI - Free Report) reported third-quarter 2019 adjusted earnings per share (EPS) of 28 cents, lagging the Zacks Consensus Estimate of 45 cents by 37.8%. The bottom line also declined 40.4% from the year-ago quarter.
This Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $243 million, up 9.6% from the year-ago quarter. On a comparable constant-currency basis, the metric improved 4.3% year over year. However, the top line missed the Zacks Consensus Estimate of $247.1 million by 1.7%.
Segmental Analysis
Cardiovascular
The Cardiovascular unit reported third-quarter revenues of $234.4 million, up 10.5% year over year. The upside can be attributed to year-over-year increase of 5.9% in the segment’s Stand-alone devices to $96.3 million. Further, revenues from Catheters improved 9.4% to $44.4 million. However, Embolization devices dropped 0.5% to $12.3 million.
Moreover, revenues at the CRM/EP unit increased 11% to $13.5 million. Further, revenues from Custom kits and procedure trays unit, under the Cardiovascular segment, rose 2.6% to $33.9 million. Inflation devices revenues declined 3.1% on a year-over-year basis at $22.2 million.
Endoscopy Devices
Revenues from the Endoscopy devices totaled $8.6 million, down 9.3% year over year.
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise
In the quarter under review, gross profit totaled $104.1 million, up 2.1% on a year-over-year basis. Gross margin came in at 42.8% of net revenues, down 320 bps year over year.
Adjusted gross margins contracted 170 bps on a year-over-year basis to 48.1% of net revenues.
Merit Medical registered selling, general and administrative expenses totaled $86.9 million, up 30.9% year over year.
Meanwhile, research and development expenses amounted to $16.9 million, up 16.9% year over year.
Operating loss in the quarter totaled $2.9 million, against the year-ago quarter’s operating income of $21.1 million.
Financial Update
Cash and cash equivalents came in at $37.3 million, down 76.2% sequentially. Total assets came in at $1.76 billion, up 1.7% sequentially.
Guidance Revised
For 2019, the company projects revenues in the range of $986-995 million (down from the previously guided range of $1-$1.03 billion).
Adjusted earnings per share is expected to range between $1.40 and $1.46 (down from the previously guided range of $1.74-$1.97).
Adjusted gross margin is estimated to range between 48.4% and 48.7% compared with prior guidance range of 49.2-49.9%.
Wrapping Up
Merit Medical exited the third quarter of 2019 on a weak note. Nonetheless, management remains optimistic about Merit Medical’s Becton Dickinson deal that is set for completion at the end of this year. The acquisitions of Cianna Medical and Vascular Insights continue to contribute to the results. Further, the company stands to benefit from the execution of the global growth and profitability plan. Continued growth in the EmboCube and the Torpedo embolic products buoys optimism. Robust Cardiovascular segment is an added positive.
However, escalating operating expenses remains a concern. Headwinds like stiff competition and higher consolidation in the healthcare industry add to woes. Contraction in gross margin is also worrisome.
Zacks Rank
Merit Medical currently carries a Zacks Rank #4 (Sell).
Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Third-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.
Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.
ResMed reported third-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.
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This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
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Merit Medical (MMSI) Q3 Earnings & Revenues Miss Estimates
Merit Medical Systems, Inc. (MMSI - Free Report) reported third-quarter 2019 adjusted earnings per share (EPS) of 28 cents, lagging the Zacks Consensus Estimate of 45 cents by 37.8%. The bottom line also declined 40.4% from the year-ago quarter.
This Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $243 million, up 9.6% from the year-ago quarter. On a comparable constant-currency basis, the metric improved 4.3% year over year. However, the top line missed the Zacks Consensus Estimate of $247.1 million by 1.7%.
Segmental Analysis
Cardiovascular
The Cardiovascular unit reported third-quarter revenues of $234.4 million, up 10.5% year over year. The upside can be attributed to year-over-year increase of 5.9% in the segment’s Stand-alone devices to $96.3 million. Further, revenues from Catheters improved 9.4% to $44.4 million. However, Embolization devices dropped 0.5% to $12.3 million.
Moreover, revenues at the CRM/EP unit increased 11% to $13.5 million. Further, revenues from Custom kits and procedure trays unit, under the Cardiovascular segment, rose 2.6% to $33.9 million. Inflation devices revenues declined 3.1% on a year-over-year basis at $22.2 million.
Endoscopy Devices
Revenues from the Endoscopy devices totaled $8.6 million, down 9.3% year over year.
Merit Medical Systems, Inc. Price, Consensus and EPS Surprise
Merit Medical Systems, Inc. price-consensus-eps-surprise-chart | Merit Medical Systems, Inc. Quote
Margins
In the quarter under review, gross profit totaled $104.1 million, up 2.1% on a year-over-year basis. Gross margin came in at 42.8% of net revenues, down 320 bps year over year.
Adjusted gross margins contracted 170 bps on a year-over-year basis to 48.1% of net revenues.
Merit Medical registered selling, general and administrative expenses totaled $86.9 million, up 30.9% year over year.
Meanwhile, research and development expenses amounted to $16.9 million, up 16.9% year over year.
Operating loss in the quarter totaled $2.9 million, against the year-ago quarter’s operating income of $21.1 million.
Financial Update
Cash and cash equivalents came in at $37.3 million, down 76.2% sequentially.
Total assets came in at $1.76 billion, up 1.7% sequentially.
Guidance Revised
For 2019, the company projects revenues in the range of $986-995 million (down from the previously guided range of $1-$1.03 billion).
Adjusted earnings per share is expected to range between $1.40 and $1.46 (down from the previously guided range of $1.74-$1.97).
Adjusted gross margin is estimated to range between 48.4% and 48.7% compared with prior guidance range of 49.2-49.9%.
Wrapping Up
Merit Medical exited the third quarter of 2019 on a weak note. Nonetheless, management remains optimistic about Merit Medical’s Becton Dickinson deal that is set for completion at the end of this year. The acquisitions of Cianna Medical and Vascular Insights continue to contribute to the results. Further, the company stands to benefit from the execution of the global growth and profitability plan. Continued growth in the EmboCube and the Torpedo embolic products buoys optimism. Robust Cardiovascular segment is an added positive.
However, escalating operating expenses remains a concern. Headwinds like stiff competition and higher consolidation in the healthcare industry add to woes. Contraction in gross margin is also worrisome.
Zacks Rank
Merit Medical currently carries a Zacks Rank #4 (Sell).
Earnings of Other MedTech Majors at a Glance
Some better-ranked stocks which reported solid results this earning season are Edwards Lifesciences (EW - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and ResMed Inc. (RMD - 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.
Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Third-quarter net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.
Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the Zacks Consensus Estimate by 1.3%.
ResMed reported third-quarter 2019 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Download Free Report Now >>