Teleflex Incorporated TFX posted third-quarter 2024 adjusted earnings per share (EPS) from continuing operations of $3.49, down 3.1% from the year-ago quarter’s figure. The metric topped the Zacks Consensus Estimate by 3.3%.
GAAP EPS came in at $2.36 in the third quarter, down 32.4% year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Following the announcement, shares of the company tumbled 14.5% yesterday, finishing the session at $201.06.
TFX’s Q3 Revenues
Net revenues in the third quarter rose 2.4% year over year (up 2.2% at constant exchange rate or CER) to $764.4 million. However, the metric missed the Zacks Consensus Estimate by 0.4%.
Segmental Analysis of TFX’s Q3 Revenues
Net revenues in the Americas were $433.3 million, which increased 1.2% from the year-ago period’s levels (up 1.5% at CER). This compares with our model’s projection of $429.4 million for the third quarter.
In the prior year, MSA revenues were booked in the Americas, which resulted in a tough year-over-year comparison. Management stated that this impacted growth by approximately 510 basis points (bps) in the third quarter.
The EMEA (Europe, the Middle East and Africa) net revenues of $150.2 million increased 5.3% year over year (up 3.9% at CER). Our model projected revenues to be $145.7 million in the third quarter. The growth was driven by a targeted strategy to increase the geographic availability of Teleflex products and improve utilization in Europe.
Revenues from Asia (Asia Pacific) rose 5.5% to $98.3 million (up 5% at CER). Our model’s projection was $145.7 million.
OEM (Original Equipment Manufacturer and Development Services) revenues were $82.6 million, an increase of 0.3% year over year (up 0.1% at CER).
TFX’s Q3 Product Revenues in Detail
In the third quarter, the Vascular Access segment recorded net revenues of $180.9 million, up 6.3% year over year at CER. This compares with our model’s projection of $179.2 million for the third quarter.
The Interventional business registered net revenues of $149.9 million, up 11.4% at CER from the same period last year. This compares with our model’s projection of $144.5 million for the third quarter.
Within the Anesthesia segment, net revenues increased 3.4% year over year at CER to $101.1 million. This compares with our model’s projection of $102.3 million for the third quarter.
The Surgical segment recorded net revenues of $111.7 million, down 1% year over year at CER. Our model’s projection was $113.6 million.
Teleflex Incorporated Price, Consensus and EPS Surprise
Teleflex Incorporated price-consensus-eps-surprise-chart | Teleflex Incorporated Quote
Revenues from the Interventional Urology segment were $83.4 million, up 13.3% year over year. This compares with our model’s projection of $80.5 million for the third quarter.
OEM recorded revenue growth of $82.6 million, up 0.3% from the year-ago figure. This compares with our model’s projection of $89.9 million for the third quarter.
The Other product segment’s (consisting of the company’s respiratory products not included in the divestiture to Medline, manufacturing service agreement revenues and Urology Care products) net revenues of $54.8 million registered a year-over-year decline of 28%. This compares with our model’s projection of $57.2 million for the third quarter.
TFX’s Margin Performance
In the reported quarter, the gross profit totaled $430.2 million, up 3.3% year over year. The gross margin expanded 50 basis points (bps) to 56.3% despite a 1.3% rise in the cost of goods sold.
Overall, the adjusted operating profit was $144.2 million, down 12.9% year over year. The adjusted operating margin saw a 332-bps contraction year over year to 18.9%.
TFX’s Liquidity Position
Teleflex exited the third quarter of 2024 with cash and cash equivalents of $243.2 million compared with $238.6 million at the end of the second quarter.
Cumulative cash flow provided by operating activities from continuing operations was $435.6 million compared with $372.4 million in the year-ago period.
An Updated 2024 View From Teleflex
GAAP revenue growth for 2024 is expected in the range of 2.90%-3.40% (previously 3.40% to 4.40%). The company’s CER revenue growth expectation for 2024 has been lowered to 3.50%-4.00% (earlier 4.25%-5.25% range). The Zacks Consensus Estimate for total revenues is pegged at $3.09 billion.
Teleflex has raised its 2024 adjusted EPS from continuing operations to a new range of $13.90-$14.20 (earlier $13.80 to $14.20), indicating growth of 2.8% to 5% year over year.
Our Take on TFX
Teleflex delivered an earnings beat and revenue miss in the third quarter of 2024. Across the EMEA, the company continues to witness soft performance in South Korea due to the ongoing impact of the doctors’ strike. Surgical revenues decreased due to a challenging year-over-year comparison in the ligation portfolio. A contraction of the adjusted operating margin does not bode well for the stock. The reduced sales guidance for full-year 2024 is also discouraging.
On a promising note, both Vascular Access and Interventional showed strong performance in the quarter. Interventional Urology growth was driven by Barrigel revenues following the October 2023 acquisition of Palette Life Sciences. Teleflex also sees many potential opportunities to expand the indications for the NASHA product platform in the long term.
TFX’s Zacks Rank and Key Picks
Teleflex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are Quest Diagnostics DGX, Intuitive Surgical ISRG and Boston Scientific Corporation BSX.
Quest Diagnostics reported third-quarter 2024 adjusted earnings of $2.30, which topped the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion beat the consensus mark by 3.4%. DGX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DGX’s 2024 earnings are expected to rise 2.1%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.3%.
Intuitive Surgical, carrying a Zacks Rank #2, posted a third-quarter 2024 EPS of $1.84, topping the Zacks Consensus Estimate by 11.5%. Revenues of $2.04 billion surpassed the Zacks Consensus Estimate by 1.2%.
ISRG has an estimated 2024 earnings growth rate of 20.1% compared with the industry’s 13.8%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.9%.
Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2024 adjusted earnings of 63 cents per share, which surpassed the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion topped the Zacks Consensus Estimate by 4.5%.
BSX has an estimated 2024 earnings growth rate of 17.6% compared with the industry’s 11.5% rise. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.2%.
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