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NuVasive (NUVA) Earnings and Revenues Beat Estimates in Q4

Zacks Equity Research

NuVasive, Inc. NUVA delivered fourth-quarter 2019 adjusted earnings per share (EPS) of 73 cents, reflecting a 5.8% improvement from the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate by 15.9%. On a reported basis, EPS came in at 55 cents, highlighting a 139.1% surge from the year-ago number.

Full-year adjusted EPS came in at $2.47, reflecting a 10.8% increase from the year-ago period. The figure exceeded the Zacks Consensus Estimate by 3.8%.

Revenues in the fourth quarter totaled $310.4 million, up 7.6% on a reported basis (up 7.8% at constant exchange rate or CER), year on year. The top line also beat the Zacks Consensus Estimate by 2.1%.

Full-year revenues came in at $1.17 billion, reflecting a 6% increase from the year-ago period (up 6.6% at CER), beating the Zacks Consensus Estimate of $1.16 billion by a close margin.

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Geographical & Segmental Details

In the reported quarter, the U.S. Spinal Hardware business revenues increased 7.9% year over year to $268.9 million. This upside was driven by continued surgeon adoption of differentiated X360 system and Advanced Materials Science implants.

NuVasive, Inc. Price, Consensus and EPS Surprise

NuVasive, Inc. Price, Consensus and EPS Surprise
NuVasive, Inc. Price, Consensus and EPS Surprise

NuVasive, Inc. price-consensus-eps-surprise-chart | NuVasive, Inc. Quote

Revenues in the U.S. Surgical Support business were $77.3 million in the fourth quarter, up 2.7% year over year. The Biologics business returned to growth in the fourth quarter, up 5% year over year.

In the December-end quarter, the company registered international revenues of $64.1 million, reflecting 14.3% year-over-year growth at CER.

Margin Details

In the reported quarter, gross profit improved 12.3% year over year to $227.1 million. Gross profit margin expanded 305 basis points (bps) to 73.2%. Adjusted operating profit improved 11% from the year-ago period to $47.6 million. Accordingly, adjusted operating margin expanded 47 bps to 15.3% in the October-December quarter.

Operational Update

The company exited 2019 with cash and cash equivalents of $213 million compared with the $117.8 million at the end of 2018. Full-year net cash, provided by operating activities, totaled $235.3 million compared with the prior year’s $219.2 million.

Guidance for 2020

NuVasive has issued its 2020 full-year guidance.

The company projects revenues to be up 4-6%. The Zacks Consensus Estimate for 2020 revenues is pegged at $1.23 billion.

Adjusted EPS are expected in the band of $2.55 to $2.65. The Zacks Consensus Estimate for this metric stands at $2.60.

Our Take

NuVasive exited the final quarter of 2019 on a promising note. We are encouraged to note that the company witnessed solid revenue growth across its U.S. Spinal Hardware business, on increased surgeon adoption of lateral single-position surgery and X360 system. Robust sales figures in some of the key international markets buoy optimism.

Earnings of Other MedTech Majors at a Glance

NuVasive carries a Zacks Rank #3 (Hold).

Some better-ranked stocks, which have reported solid results this earnings season, are Stryker Corporation SYK, STERIS plc STE and ResMed Inc. RMD.

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Its fourth-quarter revenues of $4.13 billion surpassed the consensus estimate by 0.7%. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

STERIS reported third-quarter fiscal 2020 adjusted EPS of $1.45, outpacing the Zacks Consensus Estimate by 1.4%. Net revenues of $774.3 million beat the consensus estimate by 3.3%. The company carries a Zacks Rank of 2, at present.

ResMed currently holds a Zacks Rank #2. It reported second-quarter fiscal 2020 adjusted EPS of $1.21, surpassing the Zacks Consensus Estimate by 19.8%. Its revenues of $736.2 million exceeded the consensus mark by 1.5%.

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