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Globus Medical (GMED) Q2 Earnings In Line, Revenue View Up

Zacks Equity Research

Globus Medical, Inc. GMED reported second-quarter 2019 adjusted earnings per share (EPS) of 41 cents, in line with the Zacks Consensus Estimate. Meanwhile, the metric missed the year-ago figure by 6.8%.

On a reported basis, the company registered earnings of 38 cents per share, reflecting a 13.6% decline from the year-ago quarter.

Revenue Details

Second-quarter 2019 worldwide sales summed $194.5 million, up 12.2% (up 12.7% at constant exchange rate or CER) year over year. The figure also exceeded the Zacks Consensus Estimate by 5.9%.

During the quarter under review, sales generated in the United States including robotic improved 10% year over year. However, quarterly seasonality and longer sales cycles partially dampened robotic sales in the reported period.

Globus Medical, Inc. Price, Consensus and EPS Surprise

Globus Medical, Inc. Price, Consensus and EPS Surprise

Globus Medical, Inc. price-consensus-eps-surprise-chart | Globus Medical, Inc. Quote

Meanwhile, international sales rose 23.3% from the year-earlier quarter (up 26.7% at CER).

Moreover, musculoskeletal solutions products generated revenues of $182.5 million, up 14.3% year over year. However, Enabling Technologies products revenues of $12 million in the quarter represented a 12.7% decline from the prior-year period.

Cash Position

Globus Medical exited the second quarter with cash and cash equivalents and short-term marketable securities of $240.4 million compared with $320.7 million at the end of the first quarter. Year to date, net cash provided by the operating activities was $61.8 million compared with $85.6 million a year ago.

2019 Guidance Updated

The company reaffirmed its 2019 adjusted EPS guidance at $1.72, matching the current Zacks Consensus Estimate for the metric.

However, 2019 sales guidance has been raised to $775 million from $770 million predicted earlier. The Zacks Consensus Estimate for revenues is pegged at $767.5 million, lower than the company’s projection.

Our Take

Globus Medical posted a mixed second-quarter performance with earnings meeting the Zacks Consensus Estimate while revenues beating the mark. Enabling Technologies registered strong sequential growth. Also, global spine business demonstrated a strong year-over-year improvement. An upped sales outlook for 2019 is indicative of this bullish trend to continue through the remaining year.

Zacks Rank & Key Picks

Globus Medical carries a Zacks Rank #4 (Sell).

Some better-ranked stocks having reported solid results this earnings season are Stryker Corporation SYK, Baxter International Inc. BAX and Intuitive Surgical, Inc. ISRG.

Stryker delivered second-quarter 2019 adjusted earnings per share of $1.98, topping the Zacks Consensus Estimate by 2.6%. Further, revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Baxter delivered second-quarter 2019 adjusted earnings of 89 cents per share, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Additionally, revenues of $2.84 billion outpaced the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company has a Zacks Rank of 2.

Intuitive Surgical reported second-quarter 2019 adjusted earnings per share of $3.25, which exceeded the Zacks Consensus Estimate of $2.85. Also, revenues of $1.1 billion came ahead of the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1.

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