Yahoo Finance NuVasive (NUVA) Q1 Earnings Beat Estimates, Margins Fall
NuVasive, Inc. NUVA delivered adjusted earnings per share (EPS) of 47 cents for first-quarter 2023, down 12.9% year over year. However, the figure exceeded the Zacks Consensus Estimate by 14.6%.
The one-time adjustments include expenses associated with certain amortization, litigation settlement and business transition costs among others.
GAAP loss per share was 2 cents against the year-ago earnings of 35 cents.
Total Revenues
Revenues in the first quarter totaled $307.7 million, up 5.8% year over year on a reported basis and 7.7% at a constant exchange rate or CER. The top line exceeded the Zacks Consensus Estimate by 3.1%.
First-quarter total net sales were driven by further adoption of new products and solid procedural volumes in the United States.
Geographical & Segmental Details
In the reported quarter, U.S. Spinal Hardware business revenues rose 9.3% year over year to $170.1 million on continued growth in the cervical business with strong C360 portfolio performance.
Revenues from the U.S. Surgical Support business were $65.7 million in the first quarter, up 3.3% year over year. In the quarter, Clinical Services grew year over year, primarily driven by higher case volumes. Biologics net sales declined slightly due to case mix.
International net sales for the first quarter were $71.9 million, representing a relatively flat year-over-year performance (up 8.3% at CER).
NuVasive, Inc. Price, Consensus and EPS Surprise
NuVasive, Inc. price-consensus-eps-surprise-chart | NuVasive, Inc. Quote
Margin Details
In the reported quarter, gross profit rose 4.6% year over year to $221.3 million. The gross margin contracted 87 basis points (bps) to 71.9%.
Selling, general and administrative expenses rose 9.9% year over year to $176.2 million. Research and development (R&D) expenses rose 5.2% year over year to $24.6 million.
Overall adjusted operating profit was $20.6 million, down 26.6% from the year-ago figure. Adjusted operating margin saw a 295 bps contraction year over year to 6.7%.
Financial Details
The company exited the first quarter with cash and cash equivalents of $181.2 million, compared with $248.7 million at the end of 2022.
Cumulative net cash provided by operating activities at the end of the first quarter was $1.9 million compared with the prior-year period’s $6.5 million.
2023 Guidance
NuVasive reaffirmed its guidance for full-year 2023.
The company continues to expect 2023 net sales growth of 6-8% on an as-reported and constant-currency basis. The Zacks Consensus Estimate for the same is pegged at $1.28 billion.
Merger Update
On Feb 9, 2023, NuVasive and Globus Medical entered into a definitive agreement to combine the companies in an all-stock transaction. Per the first-quarter update, both NuVasive and Globus Medical shareholders approved the proposed merger. As related to the antitrust approval, the company recently received a SEC request from the Federal Trade Commission regarding its HSR filing. As a result, the expected close of the merger has been shifted from mid-2023 to the third quarter of 2023.
Our Take
NuVasive exited the first quarter of 2023 on a strong note with earnings and revenues beating the respective Zacks Consensus Estimate. The company’s earnings performance continues to be challenged by inflationary costs, supply chain disruptions, volatility in foreign exchange rates and the persistent COVID-led impact. Contraction of both margins is discouraging.
On a positive note, strong sales performance across the U.S. Spinal Hardware and U.S. Surgical Support businesses instills optimism. The continued demand for the Simplified Cervical Disc and the Pulse platforms is also encouraging.
Zacks Rank and Key Picks
NuVasive currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Edwards Lifesciences Corporation EW, Intuitive Surgical, Inc. ISRG and Johnson & Johnson JNJ.
Edwards Lifesciences, carrying a Zacks Rank #2 (Buy), reported first-quarter 2023 adjusted EPS of 62 cents, beating the Zacks Consensus Estimate by 1.6%. Revenues of $1.46 billion outpaced the consensus mark by 4.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Edwards Lifesciences has a long-term estimated growth rate of 6.8%. EW’s earnings surpassed estimates in two of the trailing four quarters, missed the same in one and came in line in the other, the average being 1.2%.
Intuitive Surgical, having a Zacks Rank #2, reported first-quarter 2023 adjusted EPS of $1.23, which beat the Zacks Consensus Estimate by 3.4%. Revenues of $1.70 billion outpaced the consensus mark by 6.9%.
Intuitive Surgical has a long-term estimated growth rate of 13%. ISRG’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average being 1.9%.
Johnson & Johnson reported first-quarter 2023 adjusted earnings of $2.68 per share, beating the Zacks Consensus Estimate by 6.8%. Revenues of $24.75 billion surpassed the Zacks Consensus Estimate by 5%. It currently carries a Zacks Rank #2.
Johnson & Johnson has a long-term estimated growth rate of 5.5%. JNJ’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.9%.
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
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Intuitive Surgical, Inc. (ISRG) : Free Stock Analysis Report
Edwards Lifesciences Corporation (EW) : Free Stock Analysis Report
NuVasive, Inc. (NUVA) : Free Stock Analysis Report
