CONMED's (CNMD) Q4 Earnings Beat Estimates, Revenues Miss

CONMED Corporation CNMD reported fourth-quarter 2021 adjusted earnings per share (EPS) of $1.07, which surpassed the Zacks Consensus Estimate by 1.9%. The bottom line rose 27.4% from the year-ago quarter.

GAAP EPS for the quarter was 75 cents, compared with the year-ago quarter’s figure of 81 cents.

For full-year 2021, the company reported adjusted EPS of $3.21, which beat the consensus mark by 0.6%. The figure improved 47.2% from the year-ago number.

Revenues in Detail

CONMED’s fourth-quarter revenues were $273.9 million, up 8.4% year over year. However, the top line missed the Zacks Consensus Estimate by 1.3%.

At constant exchange rate (CER), revenues improved 9.1%.

For full-year 2021, the company reported revenues of $1.01 billion, up 17.2% from the previous year. At CER, revenues improved 16.3%.

Segment Details

Revenues at the Orthopedic Surgery segment totaled $117.6 million, up 4.3% from the year-ago quarter on a reported basis. At CER, revenues improved 5.2%.

Orthopedics revenues rose 0.7% on a reported basis on the domestic front, while improving 6.5% (up 7.9% at CER) from the prior-year levels on the international front.

CONMED Corporation Price, Consensus and EPS Surprise

CONMED Corporation Price, Consensus and EPS Surprise
CONMED Corporation Price, Consensus and EPS Surprise

CONMED Corporation price-consensus-eps-surprise-chart | CONMED Corporation Quote

Revenues at the General Surgery segment amounted to $156.4 million, up 11.6% year over year on a reported basis and 12.2% at CER.

Domestically, General Surgery sales increased 6.8% year over year, while international sales advanced 23.4% on a reported basis (up 25.3% at CER).

Sales by Geography

In the reported quarter, sales in the United States amounted to $148.6 million, up 5% year over year. International sales were $125.4 million, up 12.7% year over year on a reported basis and 14.3% at CER.

Margins

In the quarter under review, CONMED’s gross profit rose 15% to $155.9 million. Gross margin expanded by 330 basis points (bps) to 56.9%.

Selling & administrative expenses increased 8.3% to $107.3 million. Research and development expenses declined 3% year over year to $11.4 million.

Operating profit totaled $37.2 million, reflecting an improvement of 50.7% from the prior-year quarter. Operating margin expanded by 170 bps to 13.6%.

2022 Guidance

CONMED projects full-year 2022 revenues in the range of $1.08 billion to $1.13 billion. The Zacks Consensus Estimate is currently pegged at $1.11 billion.

Adjusted EPS for the full year is now expected to be $3.60-$3.85. The Zacks Consensus Estimate is currently pegged at $3.70.

Our Take

CONMED exited the fourth quarter on a mixed note, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same. The company witnessed strong performances across its Orthopedic and General Surgery units. It saw sales growth in both its domestic and overseas markets. Per management, the company displayed strength and agility despite a tough fourth-quarter operating environment due to the impact of the COVID-19 resurgence. Expansion of both gross and operating margins bodes well for the stock.

Meanwhile, continued pandemic-led impact in the fourth quarter does not bode well. CONMED operates in a highly competitive environment, especially with respect to the General Surgery business, which raises further apprehension.

Zacks Rank

CONMED currently has a Zacks Rank #4 (Sell).

Key Picks

Some better-ranked stocks which are supposed to report earnings soon are AMN Healthcare Services, Inc. AMN, Henry Schein, Inc. HSIC and Hologic, Inc. HOLX.

AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 19.5%. The company currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 16.2%. The company’s earnings yield of 5.5% compares favorably with the industry’s 0.8%.

Henry Schein surpassed earnings estimates in each of the trailing four quarters, the average surprise being 21.9%. The company currently carries a Zacks Rank of 2 (Buy).

Henry Schein’s long-term earnings growth rate is estimated at 11.8%. The company’s earnings yield of 5.9% compares favorably with the industry’s 4.1%.

Hologic surpassed earnings estimates in three of the trailing four quarter and missed one, the average surprise being 29.2%. The company currently carries a Zacks Rank #2.

Hologic’s long-term earnings growth rate is estimated at 7.4%. The company’s earnings yield of 5.3% compares favorably with the industry’s (5.1%).


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