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Merit Medical (MMSI) Tops Q1 Earnings and Revenue Estimates

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Merit Medical Systems,Inc. (MMSI - Free Report) reported first-quarter 2020 adjusted earnings per share (EPS) of 38 cents, which beat the Zacks Consensus Estimate of 27 cents by 40.7%. Moreover, the bottom line rose 2.7% from the year-ago quarter.

On a GAAP basis, loss per share came in at 6 cents, against EPS of 11 cents in the year-ago quarter.

Revenues in Details

This Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $243.5 million, up 2.2% from the year-ago quarter. On a comparable constant-currency basis, the figure improved 3% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $231.6 million by 5.2%.

The Cardiovascular unit reported first-quarter revenues of $235.5 million, up 2.2% year over year. The upside can be attributed to a year-over-year increase of 2.9% in the segment’s Peripheral Intervention revenues to $87.1 million. Further, revenues from Cardiac Intervention improved 0.1% to $72.6 million. Moreover, revenues from Custom Procedural Solutions climbed 3.8% to $47.6 million. Also, OEM revenues increased 3% to $28.3 million.

Endoscopy Devices

Revenues from the Endoscopy devices totaled $7.9 million, up 1.4% year over year.

Merit Medical Systems, Inc. Price, Consensus and EPS Surprise

 

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 $103.8 million, down 0.8% on a year-over-year basis. Gross margin came in at 42.6% of net revenues, down 128 basis points (bps) year over year.

Merit Medical registered selling, general and administrative expenses of$78.8 million, up 0.6% year over year.

Meanwhile, research and development expenses amounted to $14.9 million, down 7.3% year over year.

Adjusted operating margin in the quarter came in at 4.1%, showing a contraction of 3,302 bps year over year.

Financial Update

Cash and cash equivalents for the quarter came in at $50.1 million, up from $44.3 million at the end of 2019.

2020 Guidance

Due to the economic uncertainty and drastic change in the global environment on account of the coronavirus pandemic, the company has withdrawn its 2020 guidance. The company has also decided to not issue any financial outlook for the remainder of 2020.

Wrapping Up

Merit Medical exited the first quarter of 2020 on a strong note. We are encouraged to note the company’s increase in revenues at key operating segments. The acquisitions of Cianna Medical and Vascular Insights continue to contribute to results. Further, the company stands to benefit from the execution of the global growth and profitability plan. A robust pipeline of new products and other internally-developed products instill investor optimism in the stock. Despite COVID-19, the company has witnessed robust demand for several of its critical care products such as hemodynamic monitoring, peritoneal dialysis catheters and insertion tools apart from its infection control products.

However, contraction in both margins is a concern. Also, competition and higher consolidation in the healthcare industry remain dampeners.Further, economic stagnation due to the outbreak has added to the woes.

Zacks Rank and Key Picks

Merit Medical currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are DexCom, Inc. (DXCM - Free Report) , Chemed Corporation (CHE - Free Report) and ResMed Inc. (RMD - Free Report) , each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


The Zacks Consensus Estimate for DexCom’s first-quarter 2020 revenues is pegged at $356.5 million, suggesting a year-over-year improvement of 27.1%. The same for EPS stands at 10 cents, indicating year-over-year growth of 300%.

The Zacks Consensus Estimate for Chemed’s first-quarter 2020 revenues is pegged at $523.6 million, suggesting year-over-year growth of 13.3%. The same for EPS stands at $3.65, indicating year-over-year improvement of 25%.

The Zacks Consensus Estimate for ResMed’s third-quarter fiscal 2020 revenues is pegged at $722.3 million, suggesting a year-over-year improvement of 9.1%. The same for EPS stands at $1.04, indicating growth of 16.9% from the year-ago reported figure.

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