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Avanos (AVNS) Q1 Earnings Miss Estimates, Revenues Beat

Zacks Equity Research

Avanos Medical, Inc. AVNS reported adjusted earnings of 15 cents per share in first-quarter 2019, which missed the Zacks Consensus Estimate by 11.8%. Further, the bottom line plunged 80.3% year over year.

Revenues totaled $164.2 million, which beat the Zacks Consensus Estimate by 0.03% and increased nearly 5% on a year-over-year basis.

Q1 Segmental Analysis

Chronic Care

Net revenues at this segment amounted to $100 million, up 2.9% year over year.

Pain Management

The segment reported net revenues of $64.2 million. The metric rose 8.3% on a year-over-year basis.

AVANOS MEDICAL, INC. Price, Consensus and EPS Surprise

 

AVANOS MEDICAL, INC. Price, Consensus and EPS Surprise | AVANOS MEDICAL, INC. Quote

Margin Analysis

Adjusted gross profit came in at $101.1 million, up 9.9% from the prior-year quarter figure. Adjusted gross margin was 61.6% of net revenues, up 280 bps year over year.

Research and development expenses totaled $10.2 million, up 3% year over year. Selling, general and administrative expenses amounted to $106.4 million, up 23.1% year over year.

Adjusted operating profit in the first quarter was $10.4 million, soaring 395.2% on a year-over-year basis. Adjusted operating margin in the quarter was 6.3% of net revenues, up 500 bps from the year-ago quarter.

Financial Update

As of Mar 31, 2019, cash and cash equivalents totaled $348.3 million, down 9.4% from 2018-end level.

Net cash from operating activities for the three months ended Mar 31, 2019, amounted to ($23.1) million, compared with $26.3 million from the prior-year quarter.

Guidance Reaffirmed

For 2019, Avanos projects adjusted earnings per share to range between $1.15 and $1.35.

Avanos expects 2019 net revenues to increase 6-8% year over year, on a constant-currency basis (including Game Ready).

The adjusted effective tax rate is estimated in the range of 23-25%.

The company anticipates foreign currency translation to be even compared with the year-ago quarter.

Zacks Rank

Currently, Avanos carries a Zacks Rank #4 (Sell).

Earnings of MedTech Majors at a Glance

Some better-ranked stocks which reported solid results this earning season are Stryker Corporation SYK, DENTSPLY SIRONA Inc. XRAY and CONMED Corporation CNMD, each carrying a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Stryker delivered first-quarter 2019 adjusted earnings per share of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the Zacks Consensus Estimate.

DENTSPLY reported adjusted earnings per share (EPS) of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. Revenues came in at $946.2 million and surpassed the Zacks Consensus Estimate of $917.1 million.

CONMED posted first-quarter 2019 adjusted earnings per share of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the Zacks Consensus Estimate of $213 million.

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