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Penumbra (PEN) Tops on Q2 Earnings, Lowers Sales View
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Penumbra, Inc. (PEN - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 64 cents, which surpassed the Zacks Consensus Estimate by 14.3%. Adjusted EPS improved 48.8% year over year.
GAAP loss was $1.55 per share against the year-ago GAAP earnings of 48 cents per share.
Q2 Revenues
Penumbra registered revenues of $299.4 million in the reported quarter, up 14.5% year over year on a reported basis and 14.7% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by a marginal 0.3%.
Quarter in Details
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $218.2 million (72.9% of total revenues) in the United States, up 16.8% year over year on a reported basis as well as at CER.
Sales increased 8.7% to $81.2 million in the International segment. Excluding foreign currency impact, the unit’s sales were up 9.7% year over year.
On its fourth-quarter 2023 earnings call, Penumbra announced changes to its product revenue categories to provide investors with more meaningful information to understand the performance of its business and strategic direction. Per the changes, the company currently reports its product revenues under the categories — Thrombectomy, and Embolization and Access.
The company registered revenues of $203.5 million from sales of Thrombectomy products, up 25.2% on a reported basis and 25.4% at CER.
Sales of Embolization and Access products totaled $95.9 million, down 3.1% on a reported basis and 3% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit deteriorated 2.4% year over year to $162.8 million. Gross margin contracted a huge 942 basis points to 54.4% on a 44.3% surge in the cost of revenues.
Selling, general and administrative expenses rose 11.4% to $141.9 million. Research and development expenses totaled $24.9 million, up 15.8% year over year. Total operating expenses were $166.8 million, up 11.9% year over year.
The company reported adjusted operating loss of $4 million against the year-ago adjusted operating profit of $17.9 million.
Financial Update
Penumbra exited the second quarter of 2024 with cash and cash equivalents and marketable investments of $339.7 million compared with $223.1 million at the end of the first quarter of 2024.
Updated 2024 Guidance
The company updated its total revenue projection for 2024 in the range of $1.18-$1.20 billion (down from its previous guidance of $1.23-$1.27 billion). This is the result of a reduction of business in China due to a more challenging economic backdrop for medical devices in the near-term and the delayed expected launch of FLASH and BOLT 7 computer-assisted vacuum thrombectomy (CAVT) products in Europe. The Zacks Consensus Estimate for revenues is currently pegged at $1.24 billion.
It also lowered its guidance for the U.S. thrombectomy franchise’s growth to 23-25% from the previously projected band of 27-30%.
Gross margin and adjusted operating margin are expected to be in the range of 100-150 and 100-200 basis points expansion, respectively, for the full year.
Our Take
Penumbra ended second-quarter 2024 with better-than-expected results, with both its earnings and revenues surpassing the consensus mark. Both the geographic segments — United States and International — showed encouraging growth trends.
During the reported quarter, the company maintained strong growth momentum for its Thrombectomy product category, driven by CAVT products. On the flip side, revenues from the Embolization and Access business suffered due to an overall decline in some international regions.
The company incurred an operating loss in the quarter, which is discouraging. The lowered revenue guidance is indicative of the gloomy macroeconomic factors that are likely to continue to hurt growth in the rest of 2024.
Zacks Rank and Other Key Picks
Currently, Penumbra carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has a long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2 at present, reported a second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion outpaced the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company beat on earnings in each of the trailing four quarters, the average surprise being 3.31%.
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Penumbra (PEN) Tops on Q2 Earnings, Lowers Sales View
Penumbra, Inc. (PEN - Free Report) reported second-quarter 2024 adjusted earnings per share (EPS) of 64 cents, which surpassed the Zacks Consensus Estimate by 14.3%. Adjusted EPS improved 48.8% year over year.
GAAP loss was $1.55 per share against the year-ago GAAP earnings of 48 cents per share.
Q2 Revenues
Penumbra registered revenues of $299.4 million in the reported quarter, up 14.5% year over year on a reported basis and 14.7% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by a marginal 0.3%.
Quarter in Details
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $218.2 million (72.9% of total revenues) in the United States, up 16.8% year over year on a reported basis as well as at CER.
Sales increased 8.7% to $81.2 million in the International segment. Excluding foreign currency impact, the unit’s sales were up 9.7% year over year.
On its fourth-quarter 2023 earnings call, Penumbra announced changes to its product revenue categories to provide investors with more meaningful information to understand the performance of its business and strategic direction. Per the changes, the company currently reports its product revenues under the categories — Thrombectomy, and Embolization and Access.
The company registered revenues of $203.5 million from sales of Thrombectomy products, up 25.2% on a reported basis and 25.4% at CER.
Sales of Embolization and Access products totaled $95.9 million, down 3.1% on a reported basis and 3% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit deteriorated 2.4% year over year to $162.8 million. Gross margin contracted a huge 942 basis points to 54.4% on a 44.3% surge in the cost of revenues.
Selling, general and administrative expenses rose 11.4% to $141.9 million. Research and development expenses totaled $24.9 million, up 15.8% year over year. Total operating expenses were $166.8 million, up 11.9% year over year.
The company reported adjusted operating loss of $4 million against the year-ago adjusted operating profit of $17.9 million.
Financial Update
Penumbra exited the second quarter of 2024 with cash and cash equivalents and marketable investments of $339.7 million compared with $223.1 million at the end of the first quarter of 2024.
Updated 2024 Guidance
The company updated its total revenue projection for 2024 in the range of $1.18-$1.20 billion (down from its previous guidance of $1.23-$1.27 billion). This is the result of a reduction of business in China due to a more challenging economic backdrop for medical devices in the near-term and the delayed expected launch of FLASH and BOLT 7 computer-assisted vacuum thrombectomy (CAVT) products in Europe. The Zacks Consensus Estimate for revenues is currently pegged at $1.24 billion.
It also lowered its guidance for the U.S. thrombectomy franchise’s growth to 23-25% from the previously projected band of 27-30%.
Penumbra, Inc. Price, Consensus and EPS Surprise
Penumbra, Inc. price-consensus-eps-surprise-chart | Penumbra, Inc. Quote
Gross margin and adjusted operating margin are expected to be in the range of 100-150 and 100-200 basis points expansion, respectively, for the full year.
Our Take
Penumbra ended second-quarter 2024 with better-than-expected results, with both its earnings and revenues surpassing the consensus mark. Both the geographic segments — United States and International — showed encouraging growth trends.
During the reported quarter, the company maintained strong growth momentum for its Thrombectomy product category, driven by CAVT products. On the flip side, revenues from the Embolization and Access business suffered due to an overall decline in some international regions.
The company incurred an operating loss in the quarter, which is discouraging. The lowered revenue guidance is indicative of the gloomy macroeconomic factors that are likely to continue to hurt growth in the rest of 2024.
Zacks Rank and Other Key Picks
Currently, Penumbra carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Abbott Laboratories, Inc. (ABT - Free Report) and Quest Diagnostics (DGX - Free Report) .
Intuitive Surgical reported a second-quarter 2024 adjusted EPS of $1.78, which beat the Zacks Consensus Estimate by 16.3%. Revenues of $2.01 billion topped the consensus estimate by 2%. ISRG currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Intuitive Surgical has a long-term earnings growth rate of 16.1% in 2024 compared with the industry’s 14.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.97%.
Abbott, carrying a Zacks Rank #2 at present, reported second-quarter 2024 earnings of $1.14 per share, which surpassed the Zacks Consensus Estimate by 3.6%. Revenues of $10.38 billion topped the Zacks Consensus Estimate by 0.3%.
ABT has an earnings growth rate of 10.1% for 2025 compared with the S&P 500’s 9.3%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 2.34%.
Quest Diagnostics, carrying a Zacks Rank #2 at present, reported a second-quarter adjusted EPS of $2.35, which surpassed the Zacks Consensus Estimate by 1.7%. Revenues of $2.40 billion outpaced the Zacks Consensus Estimate by 0.5%.
DGX’s historical five-year earnings growth rate of 7.4% compared favorably with the industry’s 4.2%. The company beat on earnings in each of the trailing four quarters, the average surprise being 3.31%.