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Teleflex (TFX) Q4 Earnings & Revenues Top Estimates, Margins Up

·6 min read

Teleflex Incorporated’s TFX adjusted earnings per share (EPS) from continuing operations of $3.60 for the fourth quarter of 2021 rose 10.8% year over year. The bottom line surpassed the Zacks Consensus Estimate by 1.9%.

GAAP EPS of $2.69 in the fourth quarter showed a huge improvement from the year-ago figure of $1.62.

Full-year adjusted EPS was $13.33, reflecting a 24.9% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 0.5%.

Revenues in Detail

Net revenues in the fourth quarter improved 7.1% year over year to $761.9 million and 7.9% on a constant exchange rate or CER. The top line surpassed the Zacks Consensus Estimate by 1.9%.

Full-year revenues were $2.81 billion, reflecting a 10.7% rise from the year-ago period (up 8.8% at CER). Again, the metric surpassed the Zacks Consensus Estimate by 0.4%.

Americas’ net revenues of $451.7 million increased 7.7% from the year-ago period and 7.6% at CER. The Surgical, Vascular and Interventional businesses contributed to year-over-year growth in this region. However, this upside was partially offset by the impact of COVID-19.

Teleflex Incorporated Price, Consensus and EPS Surprise

Teleflex Incorporated Price, Consensus and EPS Surprise
Teleflex Incorporated Price, Consensus and EPS Surprise

Teleflex Incorporated price-consensus-eps-surprise-chart | Teleflex Incorporated Quote

EMEA net revenues of $164.5 million rose 1.9% year over year and 4.8% at CER on strength in Interventional, Surgical and Vascular Access products. Procedure volumes increased year over year as countries across the EMEA region continued to open up. However, this region continued to be impacted by COVID-led disruptions.

Revenues in Asia fell 0.1% reportedly and rose 0.5% on a CER basis year over year to $78.5 million.

Segmental Revenues

In the fourth quarter, the Vascular Access segment reported net revenues of $193 million, up 5.8% year over year and 6.4% at CER. The Interventional business registered net revenues of $114.9 million, up 7.7% year over year and 8.2% at CER.

Within the Anesthesia segment, net revenues improved 19.4% year over year and 20.5% at CER to $102.8 million. The Surgical segment recorded net revenues of $106.4 million, reflecting an increase of 15.3% year over year and 16.1% at CER. Revenues of $92.9 million in the Interventional Urology segment fell 1% year over year and 1% at CER.

Meanwhile, OEM recorded revenue growth of $67.2 million, up 30.1% year over year and 30.9% at CER. The Other product segment’s (consisting of the company’s respiratory products that were not included in the divestiture to Medline, manufacturing service agreement revenues and Urology Care products) net revenues of $84.7 million registered a decline of 13.7% year over year and 12.2% at CER.

Margins

In the reported quarter, gross profit totaled $419.7 million, up 9.4% year over year. Gross margin expanded 116 basis points (bps) to 55.1%.

Overall, adjusted operating profit was $156.4 million, up 33.8% year over year. Adjusted operating margin saw a 409-bp expansion year over year to 20.5%.

Liquidity Position

Teleflex exited 2021 with cash and cash equivalents of $445.1 million, up from $375.9 million at the end of 2020.

Cumulative cash flow provided by operating activities from continuing operations at the end of 2021 was $652.1 million compared with $437.1 million in the year-ago period.

The company has a dividend payout ratio of 10% at present.

2022 View

Teleflex has issued its 2022 financial guidance.

GAAP revenue growth for 2022 is expected in the range of 2.30-3.80% from the comparable figure in 2021. The company also expects its constant currency revenue growth for 2022 in the band of 4.00-5.50% year over year. The current Zacks Consensus Estimate for total revenues is pegged at $2.92 billion.

The company currently projects adjusted EPS from continuing operations for 2022 between $13.70 and $14.30, suggesting an increase of 2.8-7.3% from the comparable figure in 2020. The Zacks Consensus Estimate for the same is currently pegged at $14.05.

Our Take

Teleflex exited the fourth quarter of 2021 with better-than-expected results. The company exhibited robust performances across the Americas, EMEA and Asia regions amid COVID-led headwinds. Solid performances across the PICC portfolio and Intraosseous contributed to growth in the Vascular Access segment. Meanwhile, within the Interventional segment, significant growth momentum in the MANTA delivered promising results. Expansion of both margins is an added advantage. The company’s outlook for 2022, reflecting promising results compared to 2021, instills investors’ confidence.

However, a year-over-year decline in the company’s Other product segment is concerning. The ongoing COVID-19 headwinds continue to hamper UroLift procedures, further raising apprehension. Escalating operating expenses are building pressure on the bottom line.

Zacks Rank and Key Picks

Teleflex currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced their quarterly results are Henry Schein, Inc. HSIC, GlaxoSmithKline plc GSK and McKesson Corporation MCK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Henry Schein reported fourth-quarter 2021 adjusted earnings of $1.07 per share, which beat the Zacks Consensus Estimate by 18.9%. Revenues of $3.33 billion outpaced the consensus mark by 4.7%.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC has gained 35.7% versus the industry’s 7.6% growth in the past year.

GlaxoSmithKline reported fourth-quarter 2021 adjusted earnings of 69 cents per American depositary share (ADS), which beat the Zacks Consensus Estimate by 9.5%. Revenues of $13 billion outpaced the consensus mark by 3%.

GlaxoSmithKline has an estimated long-term growth rate of 6.8%. GSK has gained 19.8% compared with the industry’s 15.5% growth in the past year.

McKesson reported third-quarter fiscal 2022 adjusted EPS of $6.15, which beat the Zacks Consensus Estimate of $5.38 per share by 14.3%. Revenues of $68.61 billion surpassed the Zacks Consensus Estimate by 3.2%.

McKesson has a long-term earnings growth rate of 11.8%. MCK has gained 53.1% versus the industry’s 7.6% growth in the past year.


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