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Integer (ITGR) Q2 Earnings Miss, Revenues Beat Estimates

Zacks Equity Research

Integer Holdings Corporation ITGR reported adjusted earnings of 62 cents per share in the second quarter of 2017, versus 56 cents in the year-ago quarter. However, earnings missed the Zacks Consensus Estimate of 73 cents.

Revenues rose 4.1% year over year to $362.7 million in the second quarter and also exceeded the Zacks Consensus Estimate of $357.0 million.

Sales grew on a reported and organic basis in the second quarter, courtesy of solid performances by the company’s Cardio and Vascular business.

Quarter Details

Integer operates through three segments: Advanced Surgical, Orthopedics and Portable Medical; Cardio and Vascular; and Cardiac/Neuromodulation.

Advanced Surgical, Orthopedics, and Portable Medical: Revenues in the second quarter amounted $108.6 million, highlighting a 0.8% decrease over the prior-year quarter.

On a comparable organic constant currency basis, Advanced Surgical, Orthopedics & Portable Medical revenues rose 0.1% year over year. This was primarily driven by stable performance in Portable Medical space and new launches under the orthopedics and arthroscopic platforms.

Cardio and Vascular: Revenues at the segment totaled $132.2 million, reflecting an 8.2% increase over the prior-year quarter. This came on the back of strong demand for existing OEM product lines and contract components.

On a comparable organic constant currency basis, revenues in the reported quarter increased 8.4% over the prior year, chiefly driven by increased customer demand for electrophysiology and vascular access products.

Cardiac/Neuromodulation: Revenues at this segment were $106.2 million, a 0.7% decrease from the prior-year quarter. On a comparable organic constant currency basis, Cardiac & Neuromodulation revenues fell 0.7%.

However, relentless focus on customer relationships, numerous value-added services and opportunities for economic efficiencies are expected to drive sales at the segment. In fact, the company is well positioned to optimize total cost of ownership and supply chain control at this segment.


Integer Holdings Corporation Price, Consensus and EPS Surprise


Integer Holdings Corporation Price, Consensus and EPS Surprise | Integer Holdings Corporation Quote


Integer for full-year 2017 expects revenues in the range of $1.400–$1.430 billion on an adjusted comparable basis. Adjusted earnings for the same are projected in the range of $2.55–$2.95 per share for fiscal 2017.

Zacks Rank & Key Picks

Integer has a Zacks Rank #4 (Sell).

A few better-ranked stocks in the broader medical sector are Edwards Lifesciences Corporation EW, CryoLife, Inc. CRY and Fresenius Medical Care Corporation FMS. Notably, Fresenius Medical Care sports a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences and CryoLife have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Fresenius Medical Care represents an impressive return of 4.3% over the last one year. The company delivered a solid earnings surprise of 20.5% in the last-reported quarter.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. Notably, the stock has a one-year return of 2.3%.

CryoLife yielded a strong return of 35.8% over the last one year. The stock delivered a positive earnings surprise of 20% in the last-reported quarter.

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