Cryolife (CRY) Earnings Miss, Revenues Top Estimates in Q4

CryoLife, Inc. CRY reported fourth-quarter 2018 adjusted earnings per share (EPS) of 5 cents, down 64.3% year over year. This figure missed the Zacks Consensus Estimate by 58.33%.
 
On a reported basis, the company saw loss of 5 cents a share, narrower than the year-ago loss of 9 cents.
 
For the full year, adjusted EPS came in at 26 cents, down 45.8% from a year ago. This figure missed the Zacks Consensus Estimate by 21.2%.

CryoLife raked in total revenues of $67.8 million in the quarter under review, up 28.4% from the year-ago period. This figure also beat the Zacks Consensus Estimate by 1.2%. The upside was driven by significant increase in sales of some key products like JOTEC, On-X and tissue processing.

For the full year, total revenues came in at $262.8 million, marking an increase of 38.5% from the year-ago period. This figure surpassed the Zacks Consensus Estimate by 0.7%.

Geographic and Segmental Details

The company reported revenues from domestic and international markets. From the domestic market, i.e. the United States, the company earned total revenues of $36.5 million, showing an increase of 5.5% from the year-ago quarter. From international markets, the company earned $31.3 million, a remarkable rise of 71.9% year over year.

 

CryoLife, Inc. Price, Consensus and EPS Surprise

 

CryoLife, Inc. Price, Consensus and EPS Surprise | CryoLife, Inc. Quote

Cryolife’s operations are divided into two major categories, products and preservation services. Within the product category, Bioglue and Biofoam revenues totaled $17.9 million, up a meager 0.6% from the year-ago quarter. JOTEC revenues grossed $16.7 million, a stupendous rise of 307.3% year over year. On-X raked in $11.3 million, up 14.1%. Cardio-Genesis Cardiac Laser Therapy earned $1.7 million, down 1.7%. PerClot revenues were $0.95 million, reflecting an increase of 6.7% from the year-ago quarter. PhotoFix earned $0.69 million, up 35.2%.

In the preservation services category, cardiac tissue revenues totaled $9 million, marking an increase of 4.7% from the year-ago quarter. Revenues for the vascular tissue segment came in at $9.4 million, up 3.3%.

Margin details

In the quarter under review, gross profit grew 24.3% year over year to $45.2 million. However, gross margin contracted 218 basis points to 66.7%.

General, administrative, and marketing expenses rose 17.9% year over year to $35.6 million. Research and development expenses increased 6.6% from the year-ago quarter to $6.8 million. In the fourth quarter of 2018, Cryolife reported an operating profit of $2.8 million against operating loss of $0.20 million in the year-ago quarter.

Guidance for 2019

Cryolife has provided a financial guidance for 2019. Total revenues at the end of 2019 were projected in the range of $280-$284 million. The Zacks Consensus Estimate for full-year revenues is pegged at $282.8 million, within the guidance. Adjusted EPS for 2019 is estimated by Cryolife in the band of 28-32 cents. The Zacks Consensus Estimate for the same is 48 cents, much above the high end of the guided range.
 
Our take

Cryolife exited 2019 on a mixed note. Fourth-quarter EPS figure declined year over year due to increasing expenses from the product pipeline and investment in global expansion. On a positive note, both fourth quarter and year-end revenues surged significantly from the year-ago figures. Revenues from both domestic and international markets rose as well. The company witnessed year-over-year growth in revenues across majority of its operating segments. The company expects to deliver high revenue growth over the next five years banking on its JOTEC and On-X products. Cryolife plans to continue investing in research and development in order to expand its product portfolio.

Zacks Rank & Key Picks

Cryolife has a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Abbott Laboratories ABT, AngioDynamics Inc. ANGO and CONMED, Corp. CNMD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Abbott reported fourth-quarter 2018 adjusted EPS of 81 cents, in line with the Zacks Consensus Estimate. Revenues of $7.77 billion were below the Zacks Consensus Estimate of $7.79 billion. The stock has a Zacks Rank #2 (Buy).

AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, beating the consensus estimate by 2.9%. The stock sports a Zacks Rank #1.

CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million beat the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

 See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Abbott Laboratories (ABT) : Free Stock Analysis Report
 
AngioDynamics, Inc. (ANGO) : Free Stock Analysis Report
 
CryoLife, Inc. (CRY) : Free Stock Analysis Report
 
CONMED Corporation (CNMD) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research