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Globus Medical (GMED) Q3 Earnings In Line, View Reiterated

Zacks

Globus Medical Inc. GMED reported third-quarter 2017 earnings of 30 cents per share, in line with the Zacks Consensus Estimate. Earnings improved from the year-ago figure by a penny.

The upside was driven by roughly 11.9% growth in revenues, which totaled $151.7 million. Revenues also beat the Zacks Consensus Estimate of $151.0 million.

Q3 Details

In the reported quarter, sales in the United States increased 4.5% year over year to $125.9 million. The rise can be attributed to structural improvements. International sales increased 70.1% year over year to $25.8 million on continued market penetration in Japan, gains in key distributor markets and improved momentum in the core international business.


Research and development expenses were $10.9 million, up from $10.3 million in the year-ago quarter. Selling, general and administrative expenses were $63.4 million, up from $54.2 million in the comparable quarter of 2016. This was due to the inclusion of pre-revenue robotics and trauma commercial organization builds and increased investments in the domestic sales force.

Globus Medical, Inc. Price, Consensus and EPS Surprise

Globus Medical, Inc. Price, Consensus and EPS Surprise | Globus Medical, Inc. Quote

Financial Update

Total cash and cash equivalents increased to $154.9 million as of Sep 30, 2017, from $132.6 million as of Dec 31, 2016. Cash generated from operations in the first nine months of 2017 was $114.7 million compared with $121.5 million in the year-ago period.

Guidance

The company reaffirmed its guidance for fiscal 2017 sales at $625 million and adjusted earnings at $1.27.

Zacks Rank & Key Picks

Globus Medical currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the broader medical sector are PetMed Express, Inc. PETS, Luminex Corporation LMNX and Intuitive Surgical, Inc. ISRG. PetMed and Luminex sport a Zacks Rank #1 (Strong Buy), while Intuitive Surgical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetMed reported earnings per share of 43 cents in the second quarter of fiscal 2018, up 79.2% from the year-ago quarter’s 24 cents. Also, gross margin expanded 548 basis points year over year to 35.2% in the reported quarter.

Luminex reported adjusted earnings per share of 19 cents in the third quarter of 2017, up 216.7% year over year. Revenues increased almost 4.1% year over year to $74.1 million.

Intuitive Surgical posted adjusted earnings of $2.77 per share in the third quarter of 2017, up 34.5% year over year. Revenues rose 18% year over year to $806.1 million.

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