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Intersect ENT (XENT) Q3 Earnings and Revenues Beat Estimates
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Intersect ENT Inc. reported third-quarter 2020 adjusted loss per share of 34 cents, narrower than the Zacks Consensus Estimate of a loss of 44 cents as well as the year-ago adjusted loss of 41 cents. The quarter’s adjustments exclude the impact of losses on transaction costsand certain restructuring costs.
Revenues in Detail
Reported revenues in the third quarter declined 5.8% year over year to $22.7 million but exceeded the Zacks Consensus Estimate by 0.5%. The year-over-year downside resulted from suspension of elective surgical procedures by hospitals and limited ENT office visits due to the coronavirus pandemic.
Revenues from the PROPEL product line were $21.1 million in the quarter.
Margins
Cost of sales was $7.8 million in the reported quarter, up 60.9% year over year. Gross profit declined 22.4% to $14.9 million. Gross margin was 65.5%, reflecting a significant contraction of 1426 basis points (bps) year over year.
Intersect ENT, Inc. Price, Consensus and EPS Surprise
Selling, general and administrative expenses were down 17.9% to $21.7 million in the quarter under review. Research and development expenses were $4.6 million, down 25.9% year over year. Adjusted operating expenses were $26.3 million in the third quarter, down 19.4% year over year.
The company reported adjusted operating loss of $11.4 million, narrower than the year-ago adjusted operating loss of $13.4 million.
Cash Position
Intersect ENT exited the third quarter of 2020 with cash, cash equivalents and short-term investments of $130.7 million compared with $135.8 million at the end of the second quarter.
Outlook
Intersect ENT withdrew its 2020 guidance on Apr 23 due to uncertainties associated with the pandemic.
However, based on third-quarter elective procedure volumes and referral trends improvements, the company expects fourth-quarter revenues to be 85% to 90% of the year-ago quarter’s revenues. Also, it expects revenues to grow in 2021 relative to 2019. Intersect ENT also expects gross margin levels to return to the low-70% range by the end of 2020.
Our Take
Intersect ENT ended the third quarter with better-than-expected numbers. However, revenues declined year over year as a result of hospitals suspending elective surgical procedures, and significantly reduced ENT office visits. Significant contraction in gross margin and a higher adjusted operating loss are discouraging as well.
On a positive note, the company noted that PROPEL implants are gaining momentum and recapturing procedure volume following the drop in elective sinus procedures due to COVID-19. The company noted that based on its cost-reduction initiatives, sequential revenue growth and raising of $65 million capital announced in May, the company continues to believe it has adequate capital to operate effectively through 2022.
Zacks Rank and Stocks to Consider
Intersect ENT currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services (WST - Free Report) , Thermo Fisher Scientific (TMO - Free Report) and Align Technology (ALGN - Free Report) .
West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, a Zacks Rank #1 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.
Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently carries a Zacks Rank #2.
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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
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Intersect ENT (XENT) Q3 Earnings and Revenues Beat Estimates
Intersect ENT Inc. reported third-quarter 2020 adjusted loss per share of 34 cents, narrower than the Zacks Consensus Estimate of a loss of 44 cents as well as the year-ago adjusted loss of 41 cents. The quarter’s adjustments exclude the impact of losses on transaction costsand certain restructuring costs.
Revenues in Detail
Reported revenues in the third quarter declined 5.8% year over year to $22.7 million but exceeded the Zacks Consensus Estimate by 0.5%. The year-over-year downside resulted from suspension of elective surgical procedures by hospitals and limited ENT office visits due to the coronavirus pandemic.
Revenues from the PROPEL product line were $21.1 million in the quarter.
Margins
Cost of sales was $7.8 million in the reported quarter, up 60.9% year over year. Gross profit declined 22.4% to $14.9 million. Gross margin was 65.5%, reflecting a significant contraction of 1426 basis points (bps) year over year.
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 down 17.9% to $21.7 million in the quarter under review. Research and development expenses were $4.6 million, down 25.9% year over year. Adjusted operating expenses were $26.3 million in the third quarter, down 19.4% year over year.
The company reported adjusted operating loss of $11.4 million, narrower than the year-ago adjusted operating loss of $13.4 million.
Cash Position
Intersect ENT exited the third quarter of 2020 with cash, cash equivalents and short-term investments of $130.7 million compared with $135.8 million at the end of the second quarter.
Outlook
Intersect ENT withdrew its 2020 guidance on Apr 23 due to uncertainties associated with the pandemic.
However, based on third-quarter elective procedure volumes and referral trends improvements, the company expects fourth-quarter revenues to be 85% to 90% of the year-ago quarter’s revenues. Also, it expects revenues to grow in 2021 relative to 2019. Intersect ENT also expects gross margin levels to return to the low-70% range by the end of 2020.
Our Take
Intersect ENT ended the third quarter with better-than-expected numbers. However, revenues declined year over year as a result of hospitals suspending elective surgical procedures, and significantly reduced ENT office visits. Significant contraction in gross margin and a higher adjusted operating loss are discouraging as well.
On a positive note, the company noted that PROPEL implants are gaining momentum and recapturing procedure volume following the drop in elective sinus procedures due to COVID-19. The company noted that based on its cost-reduction initiatives, sequential revenue growth and raising of $65 million capital announced in May, the company continues to believe it has adequate capital to operate effectively through 2022.
Zacks Rank and Stocks to Consider
Intersect ENT currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services (WST - Free Report) , Thermo Fisher Scientific (TMO - Free Report) and Align Technology (ALGN - Free Report) .
West Pharmaceutical reported third-quarter 2020 adjusted EPS of $1.15, beating the Zacks Consensus Estimate by 13.9%. Net revenues of $548 million outpaced the consensus estimate by 7.2%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Thermo Fisher, a Zacks Rank #1 company, reported third-quarter 2020 adjusted EPS of $5.63, beating the Zacks Consensus Estimate by 28.8%. Revenues of $8.52 billion outpaced the consensus mark by 10%.
Align Technology reported third-quarter 2020 adjusted EPS of $2.25, surpassing the Zacks Consensus Estimate by a stupendous 281.4%. Net revenues of $734.1 million exceeded the Zacks Consensus Estimate by 38%. It currently carries a Zacks Rank #2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>