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Inogen (INGN) Earnings Miss Estimates in Q1, View Lowered

Zacks Equity Research

Inogen, Inc. INGN reported first-quarter 2019 earnings per share (EPS) of 24 cents, which missed the Zacks Consensus Estimate of 29 cents. The bottom line plunged 50% year over year.

 

Revenues of this Zacks Rank #3 (Hold) company came in at $90.2 million, which trumped the Zacks Consensus Estimate of $89.2 million. On a year-over-year basis, the top line climbed 14.1%.

 

Segmental Details

 

Sales revenues amounted to $84.8 million in the quarter under review, up 15.3% on a year-over-year basis.

 

Rental revenues totaled $5.4 million, down 1.5% year over year.

Inogen, Inc Price, Consensus and EPS Surprise

 

Inogen, Inc Price, Consensus and EPS Surprise | Inogen, Inc Quote

Revenues by Region and Category

 

Business-to-business revenues in the United States summed $26.1 million, down 7% on a year-over-year basis. Internationally, this segment recorded revenues of $19.8 million, up 17.1% on continued adoption from the company’s European partners.

 

Direct-to-consumer revenues in the United States grossed $39 million in the quarter under review. This reflects an increase of 35.9% from the prior-year quarter. The upside can be attributed to continued adoption by traditional home medical equipment providers and Internet resellers. Direct-to-consumer domestic rentals recorded net revenues of $5.4 million, down 1.5% year over year.

 

Margins

 

In the quarter under review, gross profit was $44.4 million, up 17.7% year over year. Gross margin came in at 49.2%, which expanded 150 basis points (bps).

 

Operating income was $4.9 million, down 44.2% year over year. Operating margin came in at 5.4% of net revenues, significantly down from 11% in the prior-year quarter.

 

2019 View Lowered

 

Inogen lowered its revenue guidance for 2019. Revenues are now expected between $405 million and $415 million, compared with the previously stated band of $430 million and $440 million, suggesting 13.1-15.9% growth over 2018. The Zacks Consensus Estimate of $433 million lies above the guided range.

 

The company still expects international business-to-business sales to have a solid growth rate, but now expects domestic business-to-business sales to be slightly soft.

 

Inogen also lowered its full-year GAAP net income guidance to $36-$38 million from the earlier $40-$44 million.

 

Wrapping Up

 

Inogen ended the first quarter on a mixed note. Solid business-to-business international revenues buoy optimism. Apart from these, the company’s direct-to-consumer unit performed exceedingly well in the quarter. In fact, management expects this particular unit to be the fastest growing one in 2019. The company is also optimistic about its international revenues, which witnessed solid growth in Europe during the first quarter. A considerable expansion in gross margin is an added positive.

 

On the flip side, Inogen’s rental revenues declined on a year-over-year basis in the first quarter. In fact, the company expects rental revenues to grow modestly in 2019. Moreover, operating margin contraction is worrisome. Inogen lowered its guidance for 2019, which is disheartening.

 

Earnings of MedTech Majors at a Glance

 

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

 

Stryker delivered first-quarter 2019 adjusted EPS 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 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 EPS of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the consensus estimate of $213 million.

 

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