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Inogen's (INGN) Q3 Earnings and Revenues Beat Estimates

Zacks Equity Research

Inogen, Inc. INGN reported third-quarter 2019 earnings per share (EPS) of 31 cents, which beat the Zacks Consensus Estimate of 23 cents. The bottom line also plunged 57.5% year over year.

 

Revenues of this Zacks Rank #3 (Hold) company came in at $91.8 million, which surpassed the Zacks Consensus Estimate of $91.4 million. On a year-over-year basis, the top line dropped 3.7%.

 

Segmental Details

 

Revenues in the Sales segment amounted to $86.4 million in the quarter under review, down 3.72% on a year-over-year basis.

 

Rental revenues totaled $5.4 million, down 3.8% year over year.

 

Revenues by Region and Category

 

Business-to-business revenues in the United States amounted to $30.1 million, down 0.4% on a year-over-year basis. Per management, the downside was caused by decline in orders from one large national provider.

Inogen, Inc Price, Consensus and EPS Surprise

 

Inogen, Inc Price, Consensus and EPS Surprise

Inogen, Inc price-consensus-eps-surprise-chart | Inogen, Inc Quote

 

Internationally, this segment recorded revenues of $18.5 million, down 12.5% year over year and 10.2% at constant currency. Per management, the decline was caused by a slowdown of orders in Great Britain and Spain due to tender uncertainty, capital expenditure constraints, and softness of orders in France.

 

Direct-to-consumer revenues rose 1.4% year over year to $37.8 million in the quarter under review on higher sales representative productivity.

 

Margins

 

In the third quarter, gross profit was $47 million, down 11.5% year over year. Gross margin came in at 51.2%, down significantly by 420 basis points (bps).

 

Operating income was $8.1 million, down 22% year over year. Operating margin came in at 8.8% of net revenues, down 200 bps from the prior-year quarter’s figure.

 

Guidance

 

For 2020, Inogen expects total revenues in the range of $410-$415 million, which suggests 10.1-11.4% growth over the 2019 guidance mid-point of $372.5 million. The Zacks Consensus Estimate is pegged at $408 million, which is within the guiance.

 

The company expects rental revenues to be up modestly on a year-over-year basis.

 

Inogen forecasts 2020 net income in the range of $25-$27 million, which calls for growth of 4.2-12.5%.

 

For 2019, Inogen has kept its guidance intact.

 

The company expects revenues in the range of $370-$375 million, calling for year-over-year growth of 3.3-4.7%. The Zacks Consensus Estimate for the same is pegged at $371.5 million, which is within the guidance.

 

2019 net income guidance range is expected in the band of $23-$25 million. Operating income guidance is in the range of $26-$28 million.

 

Wrapping Up

 

Inogen ended the third quarter on a strong note. However, business-to-business international and domestic revenues fell year over year in the quarter. Notably, international revenues were impacted by headwinds in Great Britain, Spain and France. Moreover, operating and gross margin declines are a concern. However, Inogen has issued a solid guidance for 2020 and has kept its 2019 guidance intact.

 

Earnings of Other MedTech Majors at a Glance

 

Some better-ranked companies, which posted solid results this earnings season, are Edwards Lifesciences EW, Thermo Fisher Scientific Inc TMO and ResMed Inc RMD, each carrying a Zacks Rank #2 (Buy). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.

 

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the consensus estimate by 2.1%. Revenues of $6.27 billion outpaced the consensus mark by 1.3%.

 

ResMed reported fiscal first-quarter 2020 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.

 

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