Integer (ITGR) Q1 Earnings Miss, Revenues Beat Estimates

Integer Holdings Corporation (NYSE:ITGR) reported adjusted earnings of 41 cents per share in the first quarter of 2017, a penny down on a year-over-year basis. Also, earnings missed the Zacks Consensus Estimate of 58 cents.

Revenues rose 4% year over year to $345.4 million in the first quarter and also exceeded the Zacks Consensus Estimate of $332 million.

Sales grew on a reported and organic basis in the first quarter, courtesy of solid performances by the company’s Cardio & Vascular, Advanced Surgical and Orthopedics & Portable Medical product lines.

Quarter Details

Integer operates through three segments: Advanced Surgical, Orthopedics and Portable Medical; Cardio and Vascular; and Cardiac/Neuromodulation.

Advanced Surgical, Orthopedics, and Portable Medical: Revenues in the first quarter was $105.1 million, highlighting a 6.9% increase over the prior-year quarter.

On a comparable organic constant currency basis, Advanced Surgical, Orthopedics & Portable Medical revenues jumped 8% year over year. This was primarily driven by solid performance in Portable Medical space and several launches under the orthopedics and arthroscopic platforms.

Cardio and Vascular: Revenues at the segment totaled $125.1 million, reflecting a 10% increase over the prior-year quarter. This came on the back of strong demand for existing OEM product lines and contract components.

On a comparable organic constant currency basis, revenues in the reported quarter increased 10% over the prior year, chiefly driven by increased customer demand for electrophysiology and vascular access products.

Cardiac/Neuromodulation: Revenues at this segment were $103.8 million, a 4% decrease from the prior-year quarter. On a comparable organic constant currency basis, Cardiac & Neuromodulation revenues fell 3%.

However, relentless focus on customer relationships, numerous value-added services and opportunities for economic efficiencies are expected to drive sales at the segment. In fact, the company is well positioned to optimize total cost of ownership and supply chain control at this segment.

Guidance

Integer reaffirmed its full-year 2017 sales & adjusted earnings per share guidance.

Integer continues to expect revenues in the range of $1.390–$1.430 billion on an adjusted comparable basis. Adjusted earnings are projected in the range of $2.70–$3.10 per share for full-year 2017.

Zacks Rank & Key Picks

Integer has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader medical sector include Neovasc Inc. (NASDAQ:NVCN) , Hologic, Inc. (NASDAQ:HOLX) and Sunshine Heart Inc (NASDAQ:SSH) . Notably, all the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 31.7%.

Sunshine Heart posted a positive earnings surprise of 58.24% in the last reported quarter. The stock recorded a stellar EPS growth rate (last 3–5 years of actual earnings) of almost 22%.

Neovasc has a solid return of 17.8% for the last three months.

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