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Surmodics (SRDX) Q2 Earnings and Revenues Beat Estimates
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Surmodics, Inc. (SRDX - Free Report) reported adjusted earnings per share (EPS) of 4 cents in second-quarter fiscal 2020, which compared favorably with the Zacks Consensus Estimate of a loss of 5 cents. However, the bottom line plunged 42.9% from the year-ago quarter.
On a GAAP (reported) basis, EPS came in at 11 cents compared with 9 cents in the prior-year quarter.
Revenues in the quarter improved 0.4% year over year to $22.8 million. Also, the figure beat the Zacks Consensus Estimate of $22.5 million by 1.6%.
Fiscal Q2 Highlights
In the quarter under review, Product sales were $11.8 million, up 19.2% from the prior-year quarter. Royalty and license fee revenues totaled $8.2 million, down 17.2% from the prior-year quarter. Research, development and other revenues were $2.8 million, down 0.7% year over year.
Segmental Analysis
Medical Device
In the reported quarter, sales at the segment rose to $16.3 million, down 5.8% from the year-ago quarter. The Medical Device business unit reported an operating loss of $1.5 million in the fiscal second quarter compared with an operating loss of $0.2 million in the year-ago quarter.
In Vitro Diagnostics
In the quarter under review, sales improved 21.3% to $6.5 million. Operating income at the segment was $3.5 million in the reported quarter, compared to income of $2.9 million in the prior-year quarter.
The company’s research and development costs totaled $11.9 million, down 11.9% year over year.
Selling, general and administrative expenditures were $6.7 million, up 38.1% from the prior-year quarter.
Total operating costs and expenses in the quarter were $22.9 million, up 5.4% year over year.
The company reported adjusted operating income of $385 million, which fell 66.6% from the year-ago quarter. Adjusted operating margin came at 1.7%, showing a contraction of 339 bps.
Fiscal 2020 Guidance
Due to uncertainty surrounding the duration and extent of the COVID-19 pandemic, Surmodics has suspended its previously-issued financial guidance for fiscal year 2020.
Our Take
Surmodics exited the fiscal second quarter on a solid note. The company registered revenue growth in one of its core units viz. Invitro Diagnostics.The company also saw an increase in Product sales. Management is upbeat about the partnership with Cook Medical for commercialization of .014” and .018” low-profile PTA balloon catheters. The company also attained CE mark clearance for Telemark coronary/peripheral support microcatheter.
However, decline in Royalty and license fee revenues as well as research, development and other revenues is a concern. Medical Device revenues also declined owing to the expiration of the company’s fourth-generation hydrophilic coating patents and postponement of non-essential procedures due to the pandemic.
Zacks Rank and Other Key Picks
Surmodics currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Pacific Biosciences’ first-quarter 2020 revenues is pegged at $20.1 million, suggesting a year-over-year improvement of 22.3%. The same for loss stands at 15 cents, indicating year-over-year improvement of 25%.
The Zacks Consensus Estimate for Aphria’s fourth-quarter fiscal 2020 revenues is $100.3 million, implying a 4.4% increase from the year-earlier reported figure.
The Zacks Consensus Estimate for Exact Sciences’ first-quarter fiscal 2020 revenues is pegged at $349.2 million, suggesting year-over-year improvement of 115.5%. The same for loss stands at 60 cents, indicating growth of 9.1% from the year-ago reported figure.
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Surmodics (SRDX) Q2 Earnings and Revenues Beat Estimates
Surmodics, Inc. (SRDX - Free Report) reported adjusted earnings per share (EPS) of 4 cents in second-quarter fiscal 2020, which compared favorably with the Zacks Consensus Estimate of a loss of 5 cents. However, the bottom line plunged 42.9% from the year-ago quarter.
On a GAAP (reported) basis, EPS came in at 11 cents compared with 9 cents in the prior-year quarter.
Revenues in the quarter improved 0.4% year over year to $22.8 million. Also, the figure beat the Zacks Consensus Estimate of $22.5 million by 1.6%.
Fiscal Q2 Highlights
In the quarter under review, Product sales were $11.8 million, up 19.2% from the prior-year quarter. Royalty and license fee revenues totaled $8.2 million, down 17.2% from the prior-year quarter. Research, development and other revenues were $2.8 million, down 0.7% year over year.
Segmental Analysis
Medical Device
In the reported quarter, sales at the segment rose to $16.3 million, down 5.8% from the year-ago quarter. The Medical Device business unit reported an operating loss of $1.5 million in the fiscal second quarter compared with an operating loss of $0.2 million in the year-ago quarter.
In Vitro Diagnostics
In the quarter under review, sales improved 21.3% to $6.5 million. Operating income at the segment was $3.5 million in the reported quarter, compared to income of $2.9 million in the prior-year quarter.
Surmodics, Inc. Price, Consensus and EPS Surprise
Surmodics, Inc. price-consensus-eps-surprise-chart | Surmodics, Inc. Quote
Operational Details
The company’s research and development costs totaled $11.9 million, down 11.9% year over year.
Selling, general and administrative expenditures were $6.7 million, up 38.1% from the prior-year quarter.
Total operating costs and expenses in the quarter were $22.9 million, up 5.4% year over year.
The company reported adjusted operating income of $385 million, which fell 66.6% from the year-ago quarter. Adjusted operating margin came at 1.7%, showing a contraction of 339 bps.
Fiscal 2020 Guidance
Due to uncertainty surrounding the duration and extent of the COVID-19 pandemic, Surmodics has suspended its previously-issued financial guidance for fiscal year 2020.
Our Take
Surmodics exited the fiscal second quarter on a solid note. The company registered revenue growth in one of its core units viz. Invitro Diagnostics.The company also saw an increase in Product sales. Management is upbeat about the partnership with Cook Medical for commercialization of .014” and .018” low-profile PTA balloon catheters. The company also attained CE mark clearance for Telemark coronary/peripheral support microcatheter.
However, decline in Royalty and license fee revenues as well as research, development and other revenues is a concern. Medical Device revenues also declined owing to the expiration of the company’s fourth-generation hydrophilic coating patents and postponement of non-essential procedures due to the pandemic.
Zacks Rank and Other Key Picks
Surmodics currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space are Pacific Biosciences of California, Inc. (PACB - Free Report) , Aphria and Exact Sciences (EXAS - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Pacific Biosciences’ first-quarter 2020 revenues is pegged at $20.1 million, suggesting a year-over-year improvement of 22.3%. The same for loss stands at 15 cents, indicating year-over-year improvement of 25%.
The Zacks Consensus Estimate for Aphria’s fourth-quarter fiscal 2020 revenues is $100.3 million, implying a 4.4% increase from the year-earlier reported figure.
The Zacks Consensus Estimate for Exact Sciences’ first-quarter fiscal 2020 revenues is pegged at $349.2 million, suggesting year-over-year improvement of 115.5%. The same for loss stands at 60 cents, indicating growth of 9.1% from the year-ago reported figure.
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Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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