SurModics, Inc. 's SRDX reported adjusted earnings of 20 cents per share in the second-quarter of fiscal 2016 (ended Mar 31, 2016), surpassing the Zacks Consensus Estimate of 8 cents. Reported earnings were also higher than the year-ago figure of 19 cents.
Revenues in the quarter surged 16% to $16.7 million, which included $0.5 million from the acquisition of Creagh Medical. Reported revenues were also above the Zacks Consensus Estimate of $14.7 million.
Quarter in Detail
SurModics reports revenues in two segments - In Vitro Diagnostics (IVD) and Medical Device.
Products sales surged 44.8% to $8.2 million, reflecting an increase in reagent sales and product sales at the Medical Device and IVD segments, respectively.
Revenues at the Medical Device segment, which contributes approximately three-quarters to the company's total revenue, came in at $11.6 million, up 9.8%. Hydrophilic coating royalty revenues dropped 9% to $6.7 million.
Revenues at the IVD unit surged 32.4% to $5.1 million. The segment benefited from strong sales of stabilization reagents, antigens and BioFX branded products.
Research and development (R&D) expenses were $4.9 million, up 10.6% from the year-ago figure.
General and administrative expenses increased 22.1% to $4.9 million.
In the quarter, the company initiated the first-in-human study on the SurVeil drug-coated balloon product.
Fiscal 2016 Outlook
SurModics has updated its earnings guidance for fiscal 2016. The company expects earnings per share of 75-85 cents (previous guidance: 66-75 cents).
Revenues are now expected in the range of $63 million to $66 million, up from the previous guidance of $62-$66 million.
We are impressed by the company's second-quarter fiscal 2016 results, wherein it beat on both earnings and revenues. We are also encouraged by the company's recent acquisitions of Creagh Medical and NorMedix Inc., as well as its progress on the SurVeil drug-coated balloon platform.
SurModics carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Aegerion Pharmaceuticals, Inc. AEGR , ANI Pharmaceuticals, Inc. ANIP and Gilead Sciences Inc. GILD , each sporting a Zacks Rank #1 (Strong Buy).
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