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A month has gone by since the last earnings report for Teleflex (TFX). Shares have lost about 2.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Teleflex due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Teleflex Gains Ground on Growth in Vascular Arm in Q1
Teleflex reported earnings per share (EPS) from continuing operations of $2.24 for the first quarter of 2019, up 4.2% year over year. The bottom line also surpassed the Zacks Consensus Estimate by 3.7%.
Reported EPS came in at 89 cents, down 24.6% year over year.
Net revenues from continuing operations in the first quarter rose 4.5% year over year to $613.6 million. On a year-over-year basis, the company saw organic constant currency revenue growth of 7.6%. The top line surpassed the Zacks Consensus Estimate by 0.9%
Revenues in Detail
In the first quarter, the Vascular segment recognized net revenues of $143.9 million, up 2.5% year over year at CER. The company registered strong growth in PICC (Peripherally Inserted Central Catheters) and visual navigation products.
The Interventional business registered net revenues of $103.2 million, a 17.1% rise on a year-over-year basis at CER. This upside was backed by higher sales of Vascular Solutions products.
Within Anesthesia segment, net revenues declined 1.5% at CER to $80.3 million. Growth in sales volumes of existing products and stronger new product sales during the first quarter were partially offset by price declines.
Surgical segment realized net revenues of $86.7 million, reflecting a 5% rise at CER on increased sales of Asian cliffs (ph) and Surgical Instruments.
Revenues at the Interventional Urology segment registered growth of 41.5% at CER to $59.7 million. The segment of OEM products recorded net revenues of $54.2 million, showing a 20.1% rise at CER.
Meanwhile, EMEA recorded revenue growth of 4.5% at CER to $154.6 million, driven by distributor convergence as well as increased sales of vascular access products.
Asia, OEM and Americas registered net revenues of $60.8 million, $54.2 million and $344 million, respectively (corresponding top-line growth of 11%, 20.1% and 6.7% each at CER), in the quarter under review.
Margin
Gross margin of 56.2% in the quarter under discussion contracted 23 basis points (bps) year over year despite a 4.1% improvement in gross profits to $344.7 million. Adjusted operating margin deteriorated 66 bps to 14.7% on 5.6% rise in operating expenses to $254.8 million.
Liquidity Position
The company exited the first quarter of 2019 with cash and cash equivalents of $271.2 million compared with $357.2 million at the end of 2018. Net cash provided by operating activities at the end of first-quarter 2019 was $60.2 million compared with $86.8 million a year ago.
2019 Outlook
Teleflex has reaffirmed its 2019 guidance. Revenues are expected to increase 5% to 6% from the year-ago period. This reflects an 1% unfavorable impact of foreign exchange translation. The Zacks Consensus Estimate for revenues is pegged at $2.58 billion.
The company also reaffirms full-year adjusted earnings per share from continuing operations at the $10.90-$11.10 band, suggesting an increase of 10.1% to 12.1% over 2018 and indicating a 2% negative impact from foreign exchange translation. The Zacks Consensus Estimate for the same is pegged at $11.03, within the company’s guided range.