Yahoo Finance Avanos (AVNS) Q1 Earnings & Revenues Surpass Estimates
Avanos Medical, Inc. AVNS reported first-quarter 2024 adjusted earnings per share (EPS) from continuing operations of 22 cents, up 69.2% year over year. The bottom line topped the Zacks Consensus Estimate of 21 cents by 4.8%.
GAAP EPS from continuing operations in the quarter under review was 1 cent against the GAAP loss per share of 17 cents a year-ago quarter.
Revenues
Revenues from continuing operations grossed $166.1 million in the reported quarter, up 4.3% year over year. The metric beat the Zacks Consensus Estimate by 1.7%.
Per management, the top line witnessed growth primarily from strong demand and volume in the Digestive Health portfolio, NeoMed neonatal and pediatric feeding solutions, as well as overall favorable volume in the Pain Management and Recovery portfolio. This was partially offset by slightly unfavorable pricing for Pain Management and Recovery products.
The company divested itsrespiratory health (RH) business in October 2023. The company now reports RH business as discontinued operations.
Segmental Analysis
Avanos provides a portfolio of innovative product offerings that focus on Pain Management and Recovery and Digestive Health.
Pain Management and Recovery’s net revenues of $71.4 million increased 1.3% year over year on a reported basis. The segment’s revenues were driven by overall favorable volume, partially offset by unfavorable pricing impact. This figure compares to our first-quarter projection of $61.8 million.
Digestive Health’s net revenues of $94.7 million improved 6.6% year over year. At constant exchange rate, revenues were up 3%. The growth was driven primarily by NeoMed neonatal and pediatric feeding solutions. This figure compares to our first-quarter projection of $101.6 million.
Margin Analysis
In the quarter under review, Avanos’ adjusted gross profit from continuing operations rose 4.6% to $99.4 million. The adjusted gross margin from continuing operation expanded 20 basis points (bps) to 59.8%. We had projected 60.7% of adjusted gross margin for the first quarter.
Selling and general expenses declined 5.9% to $83.6 million. Research and development expenses decreased 6.7% year over year to $7 million. Adjusted operating expenses from continuing operations of $83.1 million decreased 0.8% year over year.
Adjusted operating profit from continuing operations totaled $16.3 million, reflecting a 45.5% rise from the prior-year quarter’s level. Adjusted operating margin for continuing operations in the first quarter expanded 280 bps to 9.8%.
Financial Update
The company exited first-quarter 2024 with cash and cash equivalents worth $75.8 million compared with $87.7 million at the end of the fourth quarter. Total debt at the end of the first quarter of 2024 was $176.6 million compared with $168 million at the end of the last reported quarter.
Cumulative net cash used in operating activities at the first-quarter end totaled $8 million compared with $6.8 million in the prior-year period.
Guidance
Avanos has maintained its 2024 outlook.
The company expects its net sales for the full year in the range of $685 million-$705 million, reflecting a flat to 2.9% decline, reportedly. The Zacks Consensus Estimate currently stands at $691.3 million.
Avanos anticipates 2024 adjusted EPS from continuing operations between $1.30 and $1.45. The Zacks Consensus Estimate currently stands at $1.38.
Our Take
Avanos ended the first quarter of 2024 with a decent revenue uptick along with better-than-expected bottom-line growth. Its continued strength in the Digestive Health segment in the quarter was encouraging. The recovery in the Pain Management and Recovery segment was promising as well.
However, unfavorable pricing continues to hurt its sales growth. The divestment of RH business is likely to lead to a loss for the next few quarters.
AVANOS MEDICAL, INC. Price, Consensus and EPS Surprise
AVANOS MEDICAL, INC. price-consensus-eps-surprise-chart | AVANOS MEDICAL, INC. Quote
Zacks Rank and Stocks to Consider
Avanos currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Align Technology, Inc. ALGN, Ecolab ECL and Boston Scientific Corporation BSX.
Align Technology, carrying a Zacks Rank of 2 (Buy), reported first-quarter 2024 adjusted EPS of $2.14, beating the Zacks Consensus Estimate by 8.1%. Revenues of $997.4 million outpaced the consensus mark by 2.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has a long-term estimated growth rate of 6.9%. ALGN’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 5.9%.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.
Boston Scientific reported first-quarter 2024 adjusted EPS of 56 cents, beating the Zacks Consensus Estimate by 9.8%. Revenues of $3.86 billion surpassed the Zacks Consensus Estimate by 4.9%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.5%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 7.5%.
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AVANOS MEDICAL, INC. (AVNS) : Free Stock Analysis Report
