CONMED Corporation CNMD posted fourth-quarter 2018 adjusted earnings per share of 73 cents, in line with the Zacks Consensus Estimate. Also, the figure improved 5.8% from the year-ago quarter.
The New York-based medical products manufacturer posted revenues of $242.4 million, up 8.9% on a year-over-year basis and 10.8% at constant currency (cc). Notably, the figure surpassed the Zacks Consensus Estimate of $229.2 million.
Meanwhile, the Zacks Rank #4 (Sell) stock has rallied 18.1% against the industry’s 13.1% decline over the past year. The current level also compares favorably with the S&P 500 index’s 5.9% fall.
2018 Results at a Glance
CONMED reported full-year adjusted earnings per share of $2.18, edging past the Zacks Consensus Estimate by a penny. Earnings grew 15.3% from the year-ago figure.
On a full-year basis, CONMED reported revenues worth $859.6 million, which also outpaced the Zacks Consensus Estimate of $846.4 million. Revenues also climbed 7.9% year over year and 8.4% at cc.
Orthopedic Surgery sales totaled $446.7 million (52% of net revenues) while General Surgery sales grossed $412.9 million (48%).
CONMED Corporation Price, Consensus and EPS Surprise
CONMED Corporation Price, Consensus and EPS Surprise | CONMED Corporation Quote
Revenues in the segment totaled $124.8 million, up 3.1% from the year-ago quarter.
Domestically, Orthopedics revenues increased 5.2% from the prior-year quarter's level, while international sales increased 1.9%. Per management, growth was driven by strong performance bythe product portfolio.
Revenues in the segment totaled $117.6 million, up 15.7% year over year.
Domestically, General Surgery sales improved 14.2% year over year and international sales increased 19.1%.
Sales by Geography
In the reported quarter, sales in the United States grossed $125.2 million, up 10.5% year over year. International sales climbed 7.2% to $117.2 million.
Gross profit in the quarter totaled $132.7 million, up 7% year over year. Gross margin was 54.7%, contracting 100 basis points (bps).
Adjusted operating income came in at $106.8 million, up 6% year over year. Adjusted operating margin was 44.1%, down 120 bps year over year.
Cash flow from operations for the year was $74.7 million compared with $65.6 million in 2017. Long-term debt by the end of 2018 was $438.6 million.
CONMED expects 2019 sales growth in the range of 5-6% at cc.
The company forecasts 2019 adjusted diluted net earnings per share in the range of $2.42 to $2.47.This represents growth of 11-13% over 2018. Notably, the Zacks Consensus Estimate is pegged at $2.41, within the guided range.
The guidance excludes any potential impact from the pending acquisition of Buffalo Filter, which is expected to close in the first quarter of 2019.
CONMED exited the fourth quarter on a solid note, with earnings and revenues beating estimates. The company’s core units — Orthopedic Surgery and General Surgery— continue to boost the topline. Solid international sales growth is a positive. Management is confident of the product portfolio as well. It expects the ongoing buyout of Buffalo Filter to boost CONMED’s General Surgery portfolio. A strong 2019 guidance buoy optimism in the stock. The company has also invested significantly in R&D in recent times.
On the flip side, contraction in the company's gross and operating margins in the quarter is worrisome. CONMED operates in a highly competitive environment, especially with respect to the General Surgery business. The company’s high long-term debt is a concern.
Some better-ranked stocks from the broader medical space are Intuitive Surgical ISRG, Becton, Dickinson and Company BDX and AngioDynamics ANGO.
Intuitive Surgical’s long-term earnings growth is projected at 14.5%. The stock carries a Zacks Rank #2 (Buy).
Becton, Dickinson’s long-term earnings growth is expected at 11.5%. The stock carries a Zacks Rank #2.
AngioDynamics’ earnings growth for the current year is projected at 14.9%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rankstocks here.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>
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
AngioDynamics, Inc. (ANGO) : Free Stock Analysis Report
Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research