Yahoo Finance Why Is Integra (IART) Up 26% Since Last Earnings Report?
A month has gone by since the last earnings report for Integra LifeSciences (IART). Shares have added about 26% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Integra due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Integra's Q1 Earnings Match Estimates, Margins Down
Integra LifeSciences delivered adjusted earnings per share of 55 cents in the first quarter of 2024, down 25.7% year over year. The metric was in line with the Zacks Consensus Estimate.
The adjustment excludes the impact of certain non-recurring charges like structural optimization charges, the Boston recall and EU Medical Device Regulation charges.
GAAP loss per share in the first quarter was 4 cents against GAAP EPS of 29 cents in the year-ago quarter.
Revenue Discussion
Total revenues in the reported quarter dropped 3.2% year over year to $368.9 million. The metric topped the Zacks Consensus Estimate by 1.9%. Organically, revenues fell 2.5% year over year. Revenues increased 1.6% on an organic basis, excluding Boston.
Segmental Details
Coming to product categories, revenues in the Codman Specialty Surgical (CSS) segment rose 3.3% year over year on a reported basis to $256.4 million (organically, up 4.4%). The upside can be attributed to mid-single-digit growth in CSF management driven by Certas Plus valves and low-double-digit growth in neuro monitoring propelled by CereLink, mid-single-digit growth in Dural Access and Repair driven by DuraGen.
Tissue Technologies revenues totaled $112.4 million in the first quarter, down 15.3% year over year on a reported basis and 15.3% on an organic basis. The downside was due to the impact of the lost revenues related to the Boston product recall, partially offset by triple-digit growth for DuraSorb and mid-double-digit growth in Gentrix.
Margin Trend
In the reported quarter, gross profit totaled $206.8 million, down 11.2% year over year. The gross margin contracted 507 basis points (bps) to 56.1%.
Selling, general and administrative expenses dropped 0.5% to $165.8 million in the quarter under review, while research and development expenses rose 0.9% to $26.9 million.
Overall, adjusted operating profits were $14.1 million, down 64.4% year over year. Adjusted operating margin saw a 655-bps contraction year over year to 3.8%.
Financial Position
Integra exited first-quarter 2024 with cash and cash equivalents of $591.9 million, up from $276.4 million at the end of fourth-quarter 2023.
Cumulative net cash flow from operating activities at the end of first-quarter 2024 was $157.6 million compared with $261.6 million at the end of fourth-quarter 2023.
Guidance
The company updated its financial guidance for 2024.
For the full year 2024, IART now projects revenues in the band of $1.67-$1.69 billion (up from the previous guidance of $1.60-$1.62 billion). This suggests reported growth of 8.4% to 9.4%, with organic growth of 3.3% to 4.3%. The Zacks Consensus Estimate for the same is pegged at $1.61 billion.
The company projects adjusted EPS guidance for 2024 in the $3.01-$3.11 (down from previous guided range of $3.15-$3.25). The Zacks Consensus Estimate for the metric is pegged at $3.19.
The company also provided a second-quarter 2024 outlook.
For the second quarter of 2024, Integra expects reported revenues in the range of $411-$416 million, suggesting reported growth of 7.8% to 9.1% and organic growth of 1.3% to 2.6%. The Zacks Consensus Estimate for the same is pegged at $398.5 million.
Adjusted earnings per diluted share are expected in the range of 60-65 cents. The Zacks Consensus Estimate for the metric is pegged at 76 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -18.29% due to these changes.
VGM Scores
At this time, Integra has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Integra has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Integra is part of the Zacks Medical - Instruments industry. Over the past month, Avanos Medical (AVNS), a stock from the same industry, has gained 4.2%. The company reported its results for the quarter ended March 2024 more than a month ago.
Avanos Medical reported revenues of $166.1 million in the last reported quarter, representing a year-over-year change of -13.4%. EPS of $0.22 for the same period compares with $0.27 a year ago.
For the current quarter, Avanos Medical is expected to post earnings of $0.29 per share, indicating a change of +20.8% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Avanos Medical has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Integra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report
AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
