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Teleflex (TFX) Earnings and Revenues Beat Estimates in Q1
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Teleflex Incorporated’s (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $2.72 for the first quarter of 2020 were up 21.4% year over year. The bottom line also surpassed the Zacks Consensus Estimate by 18.3%.
GAAP EPS for the first quarter was $2.78, reflecting a massive surge from the year-ago 89 cents.
Revenues in Detail
Net revenues in the first quarter rose 2.8% year over year to $630.6 million and 4% on a constant exchange rate or CER. The top line surpassed the Zacks Consensus Estimate by 2%.
Segmental Revenues
In the first quarter, the Vascular Access segment reported net revenues of $150.3 million, up 4.4% year over year and 5.6% at CER. The company registered strong growth in PICC (Peripherally Inserted Central Catheters) and EZ-IO.
The Interventional business registered net revenues of $99.9 million, reflecting a 3.2% fall on a year-over-year basis and 2.3% at CER. Revenues were dented by declines in complex and drainage catheters, one less selling day and the divestiture of the catheter reprocessing product line. The segment was also adversely impacted by the coronavirus pandemic due to the cancellation of certain nonemergent procedures. However, higher sales of intra-aortic balloons, OnControl and MANTA were recorded in the quarter.
Teleflex Incorporated Price, Consensus and EPS Surprise
Within the Anesthesia segment, net revenues dropped 5.7% to $75.7 million on a year-over-year basis and 3.9% at CER, primarily owing to lower sales of laryngeal masks and certain regional Anesthesia products as well as the impact of one less selling day.
The Surgical segment recorded net revenues of $75.4 million, reflecting a 13% fall on a year-over-year basis and 11.5% at CER due to the coronavirus outbreak, shutdown of the Sterigenics Atlanta plant and a one less selling day.
Revenues of $74.2 million in the Interventional Urology segment grew 24.2% on a year-over-year basis and 24.3% at CER. The uptick was primarily led by robust growth rate of UroLift till the first two weeks of March. However, the cancellation of elective procedures because of COVID-19 impacted this product line.
Meanwhile, OEM recorded revenue growth of $63.4 million, up 16.9% on a year-over-year basis and 17.5% at CER. The uptick resulted from a mixture of additional revenue arising from the HPC acquisition and an increase of sales of existing products.
The Other product segment (consisting of the company’s respiratory and urology care products) registered net revenues of $91.7 million, highlighting growth of 7.2% year over year and 9.2% at CER. The growth was primarily supported by increased demand for respiratory products, such as filters and humidification, resulting from COVID-19.
Margins
In the reported quarter, gross profit totaled $333.6 million. Gross margin expanded 10 basis points (bps) to 52.9% on a 2.9% rise in gross profit.
Selling, general and administrative expenses contracted 28.6% to $147.8 million in the quarter under review, while research and development expenses rose 0.9% to $27.4 million.
Overall adjusted operating profit was $158.4 million, up 76.2% year over year. However, adjusted operating margin saw a massive surge of 1047 bps year over year to 25.1%.
Liquidity Position
Teleflex exited the first quarter with cash and cash equivalents of $406.5 million, up from $301.1 million at the end of 2019.
Cash flow used in operating activities from continuing operations was $11.5 million at the end of first-quarter 2020 compared with net cash provided by operating activities of $60.2 million in the year-ago period.
2020 Outlook
Teleflex is currently unable to ascertain the scope and duration of the pandemic as well as quantify the actual impact. The company also anticipates material disruption caused by the evolving COVID-19 pandemic and macroeconomic environment. It further expects significant adverse financial impact of the coronavirus pandemic. Accordingly, it has withdrawn its financial guidance for 2020 which was initially issued on Feb 20.
Our Take
Teleflex exited first-quarter 2020 with better-than-expected results. We are encouraged by the robust improvement in revenues on balanced growth across majority of segments and geographies despite the virus outbreak. The UroLift momentum till the second week of March is impressive. The expansion of both margins also buoys optimism.
However, the company reported significant decline in revenues in three business segments and Asia due to the outbreak. The shutdown of one of the company’s third-party sterilization providers during the quarter is also concerning.
Zacks Rank and Stocks to Consider
Teleflex currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Aphria Inc. , Biogen Inc. (BIIB - Free Report) and Eli Lilly and Company (LLY - Free Report) .
Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.
Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.
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Teleflex (TFX) Earnings and Revenues Beat Estimates in Q1
Teleflex Incorporated’s (TFX - Free Report) adjusted earnings per share (EPS) from continuing operations of $2.72 for the first quarter of 2020 were up 21.4% year over year. The bottom line also surpassed the Zacks Consensus Estimate by 18.3%.
GAAP EPS for the first quarter was $2.78, reflecting a massive surge from the year-ago 89 cents.
Revenues in Detail
Net revenues in the first quarter rose 2.8% year over year to $630.6 million and 4% on a constant exchange rate or CER. The top line surpassed the Zacks Consensus Estimate by 2%.
Segmental Revenues
In the first quarter, the Vascular Access segment reported net revenues of $150.3 million, up 4.4% year over year and 5.6% at CER. The company registered strong growth in PICC (Peripherally Inserted Central Catheters) and EZ-IO.
The Interventional business registered net revenues of $99.9 million, reflecting a 3.2% fall on a year-over-year basis and 2.3% at CER. Revenues were dented by declines in complex and drainage catheters, one less selling day and the divestiture of the catheter reprocessing product line. The segment was also adversely impacted by the coronavirus pandemic due to the cancellation of certain nonemergent procedures. However, higher sales of intra-aortic balloons, OnControl and MANTA were recorded in the quarter.
Teleflex Incorporated Price, Consensus and EPS Surprise
Teleflex Incorporated price-consensus-eps-surprise-chart | Teleflex Incorporated Quote
Within the Anesthesia segment, net revenues dropped 5.7% to $75.7 million on a year-over-year basis and 3.9% at CER, primarily owing to lower sales of laryngeal masks and certain regional Anesthesia products as well as the impact of one less selling day.
The Surgical segment recorded net revenues of $75.4 million, reflecting a 13% fall on a year-over-year basis and 11.5% at CER due to the coronavirus outbreak, shutdown of the Sterigenics Atlanta plant and a one less selling day.
Revenues of $74.2 million in the Interventional Urology segment grew 24.2% on a year-over-year basis and 24.3% at CER. The uptick was primarily led by robust growth rate of UroLift till the first two weeks of March. However, the cancellation of elective procedures because of COVID-19 impacted this product line.
Meanwhile, OEM recorded revenue growth of $63.4 million, up 16.9% on a year-over-year basis and 17.5% at CER. The uptick resulted from a mixture of additional revenue arising from the HPC acquisition and an increase of sales of existing products.
The Other product segment (consisting of the company’s respiratory and urology care products) registered net revenues of $91.7 million, highlighting growth of 7.2% year over year and 9.2% at CER. The growth was primarily supported by increased demand for respiratory products, such as filters and humidification, resulting from COVID-19.
Margins
In the reported quarter, gross profit totaled $333.6 million. Gross margin expanded 10 basis points (bps) to 52.9% on a 2.9% rise in gross profit.
Selling, general and administrative expenses contracted 28.6% to $147.8 million in the quarter under review, while research and development expenses rose 0.9% to $27.4 million.
Overall adjusted operating profit was $158.4 million, up 76.2% year over year. However, adjusted operating margin saw a massive surge of 1047 bps year over year to 25.1%.
Liquidity Position
Teleflex exited the first quarter with cash and cash equivalents of $406.5 million, up from $301.1 million at the end of 2019.
Cash flow used in operating activities from continuing operations was $11.5 million at the end of first-quarter 2020 compared with net cash provided by operating activities of $60.2 million in the year-ago period.
2020 Outlook
Teleflex is currently unable to ascertain the scope and duration of the pandemic as well as quantify the actual impact. The company also anticipates material disruption caused by the evolving COVID-19 pandemic and macroeconomic environment. It further expects significant adverse financial impact of the coronavirus pandemic. Accordingly, it has withdrawn its financial guidance for 2020 which was initially issued on Feb 20.
Our Take
Teleflex exited first-quarter 2020 with better-than-expected results. We are encouraged by the robust improvement in revenues on balanced growth across majority of segments and geographies despite the virus outbreak. The UroLift momentum till the second week of March is impressive. The expansion of both margins also buoys optimism.
However, the company reported significant decline in revenues in three business segments and Asia due to the outbreak. The shutdown of one of the company’s third-party sterilization providers during the quarter is also concerning.
Zacks Rank and Stocks to Consider
Teleflex currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space are Aphria Inc. , Biogen Inc. (BIIB - Free Report) and Eli Lilly and Company (LLY - Free Report) .
Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, comparing favorably with the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million outpaced the consensus estimate by 14.6%. The company carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.
Eli Lilly delivered first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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