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Avanos Medical (AVNS) Q1 Earnings and Revenues Top Estimates

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·4 min read
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Avanos Medical, Inc. AVNS reported adjusted earnings per share (EPS) of 23 cents for first-quarter 2021, beating the Zacks Consensus Estimate by 27.8%. Also, the bottom line rose 43.8% year over year.

Revenues

Revenues for the quarter were $180.7 million, which beat the Zacks Consensus Estimate by 2.3%. Moreover, the top line inched up a marginal 0.2% on a year-over-year basis.

Q1 Segmental Analysis

Chronic Care

Net revenues of $121.1 million rose 4.7% year over year.

Pain Management

Net revenues of $59.6 million declined 7.9% on a year-over-year basis.

Margin Analysis

Gross profit was $91 million, down 10.6% from the prior-year quarter. Gross margin was 50.5% of net revenues, down 607 bps year over year.

Adjusted operating profit in the first quarter was $10 million, up from $1.6 million in the year-ago quarter. Adjusted operating margin came in at 5.3%, expanding 443 bps year over year.

Financial Update

The company exited the first quarter of 2021 with cash and cash equivalents worth $100.1 million compared with $111.5 million in the fourth quarter of 2020.

Net cash used in operating activities at the end of the first quarter totaled $3.3 million compared with net cash utilized in operating activities of $5.8 million in the prior-year quarter.

AVANOS MEDICAL, INC. Price, Consensus and EPS Surprise

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

AVANOS MEDICAL, INC. price-consensus-eps-surprise-chart | AVANOS MEDICAL, INC. Quote

Guidance

The company projected 2021 net sales to increase 2-4% on constant currency basis from the 2020 reported level. The Zacks Consensus Estimate for revenues is pegged at $736.5 million.

The adjusted EPS for 2021 is projected between $1.10 and $1.25. The Zacks Consensus Estimate for the same stands at $1.19.

Summing Up

Avanos exited the first quarter on a strong note. The company continues to gain from its core segment Chronic Care. Also, CORPAK and NeoMed products contributed strongly to its earnings. Further, a rise in global demand for Respiratory Health amid the pandemic aided the company’s quarterly performance. The expansion in adjusted operating margin is another plus.

However, contraction in gross margin remains a woe. Also, the company’s Pain Management unit performed weakly. Moreover, being a pure-play MedTech company, it faces stiff competition from other industry players.

Zacks Rank and Key Picks

Avanos currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader medical space are Boston Scientific Corp. BSX, Integer Holdings Corp. ITGR and HCA Healthcare, Inc. HCA, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Boston Scientific posted adjusted earnings per share (EPS) of 37 cents for the first quarter of 2021, which exceeded the Zacks Consensus Estimate by 23.3%. Revenues of $2.75 billion also exceeded the Zacks Consensus Estimate by 5.3%.

Integer Holdings reported first-quarter 2021 adjusted EPS of 97 cents, which outpaced the Zacks Consensus Estimate by 12.8%. Revenues of $290.5 million also beat the Zacks Consensus Estimate by 2.6%.

HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion too trumped the Zacks Consensus Estimate by 2.2%.

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Boston Scientific Corporation (BSX) : Free Stock Analysis Report

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Integer Holdings Corporation (ITGR) : Free Stock Analysis Report

AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report

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