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AngioDynamics (ANGO) Q2 Earnings Top, Revenues Lag Estimates

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AngioDynamics Inc. (ANGO - Free Report) reported second-quarter fiscal 2020 adjusted earnings per share (EPS) of 6 cents, which beat the Zacks Consensus Estimate of 2 cents. However, the bottom line dropped a significant 52.9% from the year-ago quarter.

Revenues of this Zacks Rank #3 (Hold) company totaled $70 million, falling short of the Zacks Consensus Estimate of $71.9 million. The top line however inched up 0.03% on a year-over-year basis. Organically, revenues were flat year over year.

Geographical Analysis

In the quarter under review, U.S. net revenues totaled $55.6 million, down 1.3% year over year and at constant currency (cc).

International revenues summed $14.4 million, up 5.6%. At cc, revenues rose 6.6%.

AngioDynamics, Inc. Price, Consensus and EPS Surprise

 

AngioDynamics, Inc. Price, Consensus and EPS Surprise

AngioDynamics, Inc. price-consensus-eps-surprise-chart | AngioDynamics, Inc. Quote

Segmental Analysis

Vascular Interventions and Therapies (VIT) Business

VIT revenues in the second quarter grossed $31.2 million, up 0.6% from the year-ago quarter’s figure.

Per management, strong growth in AngioVac and core VIT product line drove revenues.

Vascular Access (VA) Business

Revenues at this segment amounted to $22.8 million, down 4% on a year-over-year basis. Per management, lower sales of Ports and PICCs impeded quarterly growth.

Oncology/Surgery Business

Revenues at the Oncology segment improved 5.1% year over year to $16.1 million. Per management, higher sales of NanoKnife and the Alatus and IsoLoc balloon products drove the upside.

Margin Analysis

In the quarter under review, gross profit totaled $41.5 million, up 2.4% from the year-ago quarter number. Also, gross margin was 59.3%, up 140 basis points (bps) primarily driven by productivity and supply chain improvement as well as positive product mix.

Research and development expenses were $7.8 million, up 9.7% year over year. Sales and marketing expenses totaled $19.4 million, up 4.4% on a year-over-year basis. General and administrative expenses were $11 million, up 18.7%.

Guidance Reiterated

For fiscal 2020, AngioDynamics continues to expect revenues in the $280-$286 million band. The Zacks Consensus Estimate is pegged at $281.4 million, within the projected range.

The company expects EPS within 10-15 cents. The Zacks Consensus Estimate is pinned at $12 cents, much above the guided range.

Gross margin is projected in the range of 58-59%.

Notably, AngioDynamics anticipates investments related to the product launches acquired from Eximo in the second half of fiscal 2020.

Summary

AngioDynamics exited the fiscal second quarter on a mixed note. However, the company is consistently gaining from its core Oncology and VIT business units, which witnessed solid growth backed by impressive performance of the Fluid Management and AngioVac units. Management is optimistic about the recent acquisition of the C3 Wave PICC tip location system from Medical Components Inc. Apart from these, the company has completed the sale of NAMIC Fluid Management business to Medline Industries in recent times. The company has kept its fiscal 2020 view intact.

Nonetheless, softness in the company’s Vascular Access business and dismal show by the Ports and PICCs product lines raise concerns. Also, the bottom line saw a significant downside in the quarter.

Key Picks

Some better-ranked stocks in the broader medical space are Cerner Corporation (CERN - Free Report) , DexCom (DXCM - Free Report) and HealthEquity (HQY - Free Report) . While HealthEquity sports a Zacks Rank #1 (Strong Buy), Cerner and DexCom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Cerner’s fourth-quarter revenues is pegged at $1.43 billion, suggesting a year-over-year increase of 5%. The same for EPS stands at 74 cents indicating a year-over-year upside of 17.5%.

The Zacks Consensus Estimate for DexCom’s fourth-quarter revenues is pinned at $427.5 million, calling for a year-over-year increase of 26.5%. The same for EPS stands at 71 cents, hinting at year-over-year growth of 31.5%.

The Zacks Consensus Estimate for HealthEquity’s fiscal fourth-quarter revenues is pegged at $193.3 million, calling for year-over-year increase of 155%. The same for EPS stands at 18 cents.

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