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AngioDynamics (ANGO) Q1 Earnings Top, Revenues Lag Estimates

Zacks Equity Research

AngioDynamics Inc. ANGO reported first-quarter fiscal 2020 adjusted earnings per share (EPS) of 8 cents, which beat the Zacks Consensus Estimate of 4 cents. The bottom line increased significantly from the year-ago quarter’s 2 cents.

Revenues of this Zacks Rank #3 (Hold) company totaled $66 million, falling short of the Zacks Consensus Estimate of $67.6 million. The top line however increased 3.3% on a year-over-year basis. Organically, the figure fell 1%.

Geographical Analysis

In the quarter under review, U.S. net revenues totaled $52.9 million, up 2.8% year over year.

International revenues summed $13.1 million, up 5.3%.

AngioDynamics, Inc. Price, Consensus and EPS Surprise

 

AngioDynamics, Inc. Price, Consensus and EPS Surprise

AngioDynamics, Inc. price-consensus-eps-surprise-chart | AngioDynamics, Inc. Quote

Segmental Analysis

Vascular Interventions and Therapies (VIT) Business

VIT revenues in the first quarter grossed $28.9 million, up 1.1% from the year-ago quarter’s figure.

Per management, strong growth in AngioVac and Thrombolytic product line drove revenues.

Vascular Access (VA) Business

Revenues at this segment amounted to $23.2 million, which declined 2.7% on a year-over-year basis. Per management, lower sales of Ports and PICCs have impeded quarterly growth.

Oncology/Surgery Business

Revenues at the Oncology segment improved 20.9% year over year to $14 million. Per management, strong sales of BioSentry Tract Sealant System, the Alatus and IsoLoc balloon products, NanoKnife and Solero products drove the upside.

Margin Analysis

In the quarter under review, gross profit totaled $38.2 million, up 6.3% from the year-ago quarter number. Also, gross margin was 57.9%, up 170 basis points (bps) primarily driven by productivity and supply chain improvement as well as positive product mix.

Research and development expenses were $6.3 million, up 14.7% year over year. Sales and marketing expenses totaled $19.4 million, up 5.3% on a year-over-year basis. General and administrative expenses were $8.5 million, up 0.2%.

Guidance

For fiscal 2020, AngioDynamics continues to expect revenues in the $280-$286 million band. The Zacks Consensus Estimate is pegged at $282.7 million, within the projected range.

The company updated its full-year EPS view. It now expects EPS within 10-15 cents, much lower than the earlier-projected range of 25-30 cents. The Zacks Consensus Estimate is pinned at $27 cents, much above the guided range.

Notably, AngioDynamics anticipates investments related to the product launches in the second half of fiscal 2020.

Wrapping Up

AngioDynamics exited the fiscal first quarter on a mixed note. However, the company is consistently gaining from its core VIT business unit, which witnessed solid growth backed by impressive performance at the Fluid Management and AngioVac units. The recent acquisitions of BioSentry and RadiaDyne are favoring the company at the moment.

Apart from these, the company recently completed the sale of NAMIC Fluid Management business to Medline Industries. Additionally, enrolment of the first patient in NanoKnife DIRECT Clinical Study for the treatment of stage III pancreatic cancer is commendable. AngioDynamics also received approval to initiate pilot study for the use of NanoKnife to treat prostate cancer.

Nonetheless, softness in the company’s Vascular Access business and dismal show by the Ports and PICCs product lines raise concerns. Also, a slashed EPS view is worrisome.

Key Picks

Some better-ranked stocks in the broader medical space are DENTSPLY SIRONA XRAY, Stryker Corporation SYK and Varian Medical Systems VAR, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for DENTSPLY SIRONA’s third-quarter fiscal 2019 revenues is pegged at $943.2 million, suggesting 1.6% growth from the prior-year reported figure. The same for adjusted EPS stands at 49 cents, implying a 29% improvement from the year-ago reported number.

The Zacks Consensus Estimate for Stryker’s third-quarter 2019 revenues is pegged at $3.58 billion, indicating a 10.5% rise from the year-ago reported figure.  The same for adjusted EPS stands at $1.91, suggesting 13% growth from the year-earlier quarter's reported figure.

The Zacks Consensus Estimate for Varian’s fourth-quarter fiscal 2019 revenues is pegged at $853.3 million, showing a year-over-year increase of 6.4%.  The same for adjusted EPS stands at $1.21, indicating an increase of 4.3% from the year-ago reported figure.

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