Penumbra (PEN) Q2 Earnings Top Estimates, Sales View Raised
Penumbra, Inc. PEN reported second-quarter 2023 adjusted earnings per share (“EPS”) of 43 cents, which beat the Zacks Consensus Estimate of 28 cents by a huge 53.6%. The company had recorded an adjusted income of 1 cent per share in the year-ago period.
GAAP EPS was 48 cents against a loss per share of 10 cents in the prior-year quarter.
Revenues in Detail
Penumbra registered revenues of $261.5 million in the reported quarter, up 25.5% year over year on a reported basis as well as at constant exchange rate or CER. The figure also surpassed the Zacks Consensus Estimate by 3.3%.
Quarter in Details
The company reports under two geographical segments — United States and International — as well as under two product categories — Vascular and Neuro.
PEN recorded revenues of $186.7 million (71% of total revenues) in the United States, up 32% reportedly as well as at CER year over year.
Sales improved 11.7% to $74.7 million in the International segment. Excluding foreign currency impact, the unit’s sales were up 11.6% year over year.
The company registered revenues of $152.7 million from sales of vascular products, up 23.6% reportedly and 23.7% at CER from the prior-year level. There was 50% year-over-year growth in U.S. thrombectomy. The international Vascular business witnessed relatively flat year-over-year sales.
Sales of neuro products totaled $108.8 million, up 28.3% reportedly and 28.1% at CER. This business reported strong contribution from new products in the United States, Europe and Asia Pacific.
Penumbra, Inc. Price, Consensus and EPS Surprise
Penumbra, Inc. price-consensus-eps-surprise-chart | Penumbra, Inc. Quote
Margin Trend
In the reported quarter, Penumbra’s gross profit improved 24.5% to $166.9 million. However, gross margin contracted 52 basis points to 63.8% on a 27.4% rise incost of revenues.
Selling, general and administrative expenses rose 11.2% to $127.4 million. Research and development expenses totaled $21.5 million, up 10.1% year over year. Total operating expenses came in at $148.9 million, up 11% from that recorded in the prior-year quarter.
Adjusted operating income amounted to $17.9 million against the prior-year quarter’s reported loss of $0.1 million.
Financial Update
Penumbra exited second-quarter 2023 with cash and cash equivalents and marketable investments of $114.2 million compared with the first-quarter record of $199.1 million.
2023 Sales Guidance Raised
Penumbra issued updated guidance for 2023 revenues. The company expects net sales in the range of $1.05-$1.07 billion, implying a 24-26% improvement year over year. Previously, PEN anticipated sales to be in the band of $1.04-$1.06 billion in 2023. It expects the vascular business to grow slightly above the 24-26% range and the neuro business to remain below this guidance.
Our Take
Penumbra exited the second quarter of 2023 with encouraging results, wherein both revenues and earnings beat estimates.
The company’s vascular and neuro product categories showed encouraging growth trends. Its robust estimate for 2023 revenues reflects continued demand for its products. Strong uptake following the launch of Lightning Flash, Lightning Bolt 7 and RED 72 with SENDit technology accelerated top-line growth.
Moreover, Penumbra’s ability to improve net gross margins and EPS amid ongoing inflationary pressures and supply-chain headwinds buoy optimism.
Zacks Rank and Stocks to Consider
Currently, Penumbra carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories ABT, Elevance Health, Inc. ELV and Intuitive Surgical, Inc. ISRG.
Abbott, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported a second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed the same once, the average surprise being 4.2%.
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