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Integra Lifesciences' (IART) Earnings Top Estimates in Q2

Zacks Equity Research

Integra LifeSciences Holdings Corporation IART delivered adjusted earnings per share (EPS) of 73 cents in the second quarter of 2019, up 21.7% from a year ago. The same surpassed the Zacks Consensus Estimate by 12.3%.

Revenue Discussion

Total revenues in the reported quarter inched up 4.8% year over year to $383.6 million. This figure beat the Zacks Consensus Estimate by 2.7%. Excluding revenues from the current-period acquisitions, product discontinuations and the effect of currency exchange rates, organic revenues rose 6.6% year over year, in line with the earlier guidance for 2019.

Coming to product categories, revenues from the Codman Specialty Surgical segment rose 4.1% to $249.3 million. The upside was driven by the commercial launch and positive customer reception of several new products like CereLink , CertasPlus , and the Integra DUO.

Orthopedics and Tissue Technologies revenues totaled $134.4 million in the second quarter, up 6.1% year over year. The improvement was fueled by sales growth in the Wound Reconstruction segment on strength in products like MediHoney and Total Contact Cast, as well as advanced tissue products portfolio.

Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise

Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise

Integra LifeSciences Holdings Corporation price-consensus-eps-surprise-chart | Integra LifeSciences Holdings Corporation Quote

Margin Trend

For the reported quarter, gross profit totaled $239.9 million. Gross margin expanded 12 basis points (bps) to 62.6% in the reported quarter on a 4.9% rise in gross profit. Selling, general and administrative expenses dropped 6.4% to $165.4 million in the quarter under review while research and development expenses contracted 7.7% to $17.6 million. Operating profit came in at $56.9 million. Overall, adjusted operating margin saw a 586-bps expansion to 14.8% in the second quarter.

Financial Position

Integra LifeSciences exited the second quarter with cash and cash equivalents of $176.1 million, up from $157 million at the end of the first quarter. Year to date, net cash flow from operating activities in the second quarter was $78 million, up from $77.7 million a year ago.

2019 Outlook

Integra LifeSciences has reaffirmed its revenue guidance for 2019. The company expects 2019 revenues in the range of $1.51-$1.52 billion, indicating 3.5% growth at the midpoint. Organic revenue growth is expected at roughly 5%. The Zacks Consensus Estimate for 2019 revenues is pegged at $1.52 billion, near the high end of the guided range.

The company has raised its adjusted earnings per share to the band of $2.70-2.75 from the earlier $2.65-2.72. The Zacks Consensus Estimate for 2019 adjusted earnings stands at $2.70, near the low end of the company’s guided range.

Our Take

Integra LifeSciences exited the second quarter on a solid note. We are upbeat about the year-over-year revenue growth across both the key business segments of the company. Several product launches in the quarter buoy optimism. Expansion of both the margins and a raised EPS guidance for 2019 are encouraging.

Zacks Rank & Key Picks

Integra LifeSciences currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical space are Hologic Inc. HOLX, DENTSPLY SIRONA Inc. XRAY and Teleflex Inc. TFX.

Hologic is scheduled to release second-quarter 2019 results on Jul 31. The Zacks Consensus Estimate for the quarter’s adjusted EPS is pegged at 61 cents and for revenues stands at $834.6 million. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

DENTSPLY SIRONA is scheduled to release second-quarter 2019 results on Aug 2. The Zacks Consensus Estimate for its adjusted EPS is pegged at 62 cents and for revenues, $1.03 billion. The stock sports a Zacks Rank #1.

Teleflex is expected to release second-quarter 2019 results on Aug 1. The Zacks Consensus Estimate for its adjusted EPS is $2.59 and for the top line, $636.7 million. The stock has a Zacks Rank of 2.

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Teleflex Incorporated (TFX) : Free Stock Analysis Report

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