NuVasive Earnings: Tops Profit Estimate, Revenue Lighter Than Expected

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NuVasive, Inc. (NASDAQ:NUVA) climbed to a profit in the third quarter and beat Wall Street’s expectations in the process. NuVasive is a medical device company focused on the design, development, and marketing of products for the surgical treatment of spine disorders.

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NuVasive, Inc. Earnings Cheat Sheet

Results: Reported a profit of $2.4 million (5 cents per diluted share) in the quarter. NuVasive, Inc. had a net loss of $67.6 million or a loss $1.69 per share in the year-earlier quarter.

Revenue: Rose 11.7% to $148.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: NuVasive, Inc. reported adjusted net income of 23 cents per share. By that measure, the company beat the mean estimate of 10 cents per share. It fell short of the average revenue estimate of $154.2 million.

Quoting Management: Alex Lukianov, Chairman and Chief Executive Officer, said, “Market challenges led third quarter results to fall short of our expectations. We provided early warning of the shortfall and have implemented a plan to address the issues. We are re-engaging with our sales force on a deeper level, accelerating the pace of sales force hiring to more than compensate for losses in the quarter, and increasing executive engagement with our top customers. Our market share taking strategy continues to be intact and we have a number of growth catalysts that will help drive growth for the balance of this year and beyond. We are in a unique position as the spine market continues to shift toward minimally invasive solutions and we intend to fully capitalize upon it.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 15.3%, with the biggest boost coming in the first quarter when revenue rose 21.9% from the year earlier quarter.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 5.9 percentage points to 74.6% from the year-earlier quarter. In that span, margins have contracted an average of 4.8 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the second quarter, by 4 cents in the first quarter, and by 4 cents in the fourth quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 17 cents a share to 14 cents over the last sixty days. The average estimate for the fiscal year is now 51 cents per share, down from 58 cents sixty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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