Intersection ENT Inc. XENT reported an adjusted loss per share of 49 cents in the second quarter of 2021, larger than Zacks’ consensus estimate of a loss of 42 cents. However, the net result was narrower than the adjusted loss of 65 cents a year ago. Adjustments for the quarter exclude the impact of some integration costs and others.

Meanwhile, without adjustments, the GAAP net loss for the second quarter was 50 cents compared to the loss of 71 cents a year ago.

Income in detail

Second-quarter reported revenue jumped 179.6% year-over-year to $ 27.3 million, beating Zacks’ consensus estimate by 0.5%. This year-over-year increase is attributable to higher PROPEL revenues, resulting from a significant recovery in demand for elective surgeries. In addition, the company generated record revenues from SINUVA through improved access and coverage and an evolution of sinus procedures to outpatient surgery centers and in-office care.

Margins

Cost of sales was $ 8.3 million in the current quarter, up 13.3% year-over-year. Gross profit increased 684.9% to $ 19 million. Gross margin jumped 69.5%, reflecting a 4478 basis points (bps) year-over-year expansion.

Selling, general and administrative expenses increased 47.4% to $ 28.7 million in the quarter under review. Research and development expenses were $ 6.4 million, up 58.3% year over year. Total operating expenses were $ 35.1 million in the second quarter, up 49.2% year over year.

Intersect ENT, Inc. Price, Consensus and EPS Surprise

Intersect ENT, Inc. price-consensus-eps-surprise-chart | Estimate Intersect ENT, Inc.

The company reported an adjusted operating loss of $ 16.1 million, lower than the adjusted operating loss of $ 21.1 million from the previous year.

Update of the 2021 guidelines

The company did not mention anything about its forecast in its earnings release. Earlier in July, during the preliminary announcement of second quarter results, the company reiterated its forecast for full-year revenue between $ 117 million and $ 121 million. The gross margin for the full year is expected to be in the low to mid range of 70%.

Acquisitions news

Intersect ENT recently entered into a definitive agreement with Medtronic MDT, in which the latter agreed to acquire Intersect ENT for $ 1.10 billion. The deal is expected to close by the end of Medtronic’s 2021-2022 fiscal year (ending April 2022), subject to the satisfaction of customary closing conditions, including receipt of regulatory clearances and shareholder approval. Intersect ENT.

Acquisition of Intersect ENT, which provides clinically proven PROPEL and SINUVA sinus implants that deliver an anti-inflammatory steroid to aid healing, will allow Medtronic to expand its portfolio of products used in ear procedures , nose and throat. The acquisition will further enable Medtronic to leverage complementary product lines and a customer base that will advance Medtronic’s efforts to positively impact patients with chronic rhinosinusitis (CRS).

Our opinion

Intersect ENT reported mixed results for the second quarter of 2021. The company reported a larger-than-expected adjusted net loss in the second quarter. Rising operating costs are putting pressure on results. However, revenues improved year over year due to increased PROPEL revenues resulting from a significant recovery in demand for elective surgeries. The company also generated increased revenue for SINUVA through improved access and coverage and an evolution of sinus procedures to outpatient surgery centers and the in-office setting.

Significant investor optimism currently surrounds the company’s recently announced agreement to be acquired by MedTech mainstay Medtronic for $ 1.10 billion. Following the transaction’s announcement on August 6, the company’s shares rose 11.6% to close the session at $ 27.37.

Zacks rank and choice of keys

The company currently wears a Zacks Rank # 3 (Hold).

Some top-ranked stocks in the broader medical space that have announced their quarterly results are Western Pharmaceutical Services, Inc. WST, Encompass health company EHC, both carrying a Zacks Rank # 2 (Buy).

West Pharmaceutical reported adjusted earnings per share (EPS) of $ 2.46 in the second quarter of 2021, beating Zacks’ consensus estimate by 41.4%. Revenue of $ 723.6 million was 8.7% higher than Zacks’ consensus estimate. You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

Encompass Health announced adjusted EPS of $ 1.17 in the second quarter of 2021, beating Zacks’ consensus estimate by 15.8%. Revenue of $ 1.3 billion exceeded the consensus mark of 1.5%.

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Medtronic PLC (MDT): Free Stock Analysis Report

West Pharmaceutical Services, Inc. (WST): Free Stock Analysis Report

Intersect ENT, Inc. (XENT): Free Stock Analysis Report

Encompass Health Corporation (EHC): Free Inventory Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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