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Intersect ENT (XENT) Reports Q3 Loss, Revenues Meet Estimates

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Intersect ENT Inc. (XENT - Free Report) reported third-quarter 2019 loss per share of 41 cents, wider than the Zacks Consensus Estimate of loss of 40 cents. The reported loss was significantly wider than the year-ago loss of 25 cents.

Reported revenues in the third quarter declined 2.5% year over year to $24.1 million but was in line with the Zacks Consensus Estimate. The year-over-year downside resulted from lower sales of the PROPEL product portfolio. However, SINUVA contributed 5% to third-quarter 2019 revenues.

Margins

Cost of sales was $4.9 million in the reported quarter, down 6.3% year over year. Gross margin was 79.7%, reflecting an expansion of 82-basis points (bps) year over year.

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

Selling, general and administrative expenses were up 16.1% to $26.4 million in the quarter under review. Research and development expenses were $6.1 million, up 26.1% year over year. The company reported operating loss of $13.4 million compared with the year-ago operating loss of $8.2 million.

Cash Position

Intersect ENT exited the third quarter of 2019 with cash, cash equivalents and short-term investments of $89.2 million compared with $93.5 million at the end of the second quarter.

2019 Guidance Reaffirmed

Intersect ENT expects 2019 revenues to be flat at $108.5 million reported in 2018 (unchanged from the prior provided figure). The Zacks Consensus Estimate for the metric is pegged at $108.6 million, which is above the company’s provided figure.

Its 2019 outlook for gross margin was reiterated at 80-81% and operating expenses outlook at $135-$137 million.

Our Take

Intersect ENT ended the third quarter on a disappointing note, with wider net loss and revenues declining on a year-over-year basis.

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

Zacks Rank & Other Key Picks

Currently, Intersect ENT carries a Zacks Rank #2 (Buy).

Some other top-ranked medical device companies, which posted solid results this earnings season, are ResMed Inc (RMD - Free Report) , NuVasive, Inc (NUVA - Free Report) and Thermo Fisher Scientific Inc (TMO - Free Report) .

ResMed, with a Zacks Rank #2, reported first-quarter fiscal 2020 adjusted EPS of 93 cents, surpassing the Zacks Consensus Estimate by 6.9%. Its revenues of $681.1 million outpaced the consensus mark by 3.7%.

NuVasive’s third-quarter 2019 adjusted EPS of 59 cents surpassed the Zacks Consensus Estimate by 9.3%. Its revenues totaled $290.8 million, which surpassed the consensus estimate by 2.4%. The stock currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Thermo Fisher, with a Zacks Rank #2, delivered third-quarter 2019 adjusted EPS of $2.94, beating the Zacks Consensus Estimate by 2.1%. Its revenues of $6.27 billion beat the Zacks Consensus Estimate by 1.3%.

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