Integer Holdings Corporation ITGR delivered adjusted earnings per share (EPS) of $1.43 in the fourth quarter of 2024, which improved 1.4% year over year. The figure missed the Zacks Consensus Estimate by 2.1%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The adjustments include expenses related to the amortization of intangible assets and restructuring and restructuring-related charges, among others.
GAAP EPS for the quarter was 91 cents, reflecting an improvement of 15.2% year over year.
Full-year 2024 EPS was $5.30, up 14.9% from the comparable 2023 period. However, the metric lagged the Zacks Consensus Estimate by 0.6%.
ITGR Revenues in Detail
Integer Holdings registered revenues of $449.5 million in the fourth quarter, up 11.1% year over year. The figure topped the Zacks Consensus Estimate by 0.8%.
Organically, revenues increased 10.6%.
Robust sales from the majority of the product lines drove the company’s top line in the reported period.
Full-year 2024 revenues were $1.72 billion, reflecting a 10.3% uptick from the comparable 2023 period on a reported basis. The metric was in line with the Zacks Consensus Estimate.
Shares of this company lost nearly 5.6% at yesterday’s closing.
Integer Holdings Segmental Analysis
Integer Holdings operates through three product lines — Cardio and Vascular (C&V); Cardiac Rhythm Management & Neuromodulation (CRM&N) and Other Markets.
During the fourth quarter of 2024, management began referring to ITGR’s Advanced Surgical, Orthopedics & Portable Medical product line as the Other Markets product line. This was aimed at better capturing the evolving nature of the company’s products and ongoing strategic focus. Per management, the name change has no impact on the financial information previously reported.
Revenues of the C&V business totaled $255.3 million, up 14.7% from the prior-year quarter on a reported basis and up 11.4% organically. The solid year-over-year performance was driven by new product ramps in electrophysiology and the Pulse acquisition. This compares to our fourth-quarter projection of $259.5 million.
Revenues of the CRM&N business were $170.5 million, up 11.3% year over year on a reported and 10.2% on an organic basis. The solid year-over-year performance was driven by strong growth in emerging Neuromodulation customers with premarket approval products and normalized CRM growth. This compares to our fourth-quarter projection of $166.4 million for the product line.
Integer Holdings’ Other Markets revenues amounted to $23.7 million, down 17.3% year over year on a reported basis, but up 0.4% on an organic basis. Per management, this resulted from the execution of the planned multi-year Portable Medical exit announced in 2022. This compares to our fourth-quarter projection of $29.8 million for Other Markets revenues.
Integer Holdings Corporation Price, Consensus and EPS Surprise
Integer Holdings Corporation price-consensus-eps-surprise-chart | Integer Holdings Corporation Quote
ITGR’s Margin Analysis
Integer Holdings generated a gross profit of $116.8 million in the fourth quarter, up 6.6% year over year. However, the gross margin in the reported quarter contracted 110 basis points (bps) to 25.9%.
We had projected 27.8% of gross margin for the fourth quarter.
Selling, general and administrative expenses were $47.5 million, up 4.8% year over year. Research, development and engineering costs were $10.6 million in the quarter, down 18.7% year over year. Adjusted operating expenses of $58.1 million decreased 0.5% year over year.
Adjusted operating profit totaled $58.7 million, reflecting a 14.6% uptick from the prior-year quarter. Adjusted operating margin in the fourth quarter expanded 40 bps to 13.1%.
Integer Holdings’ Financial Position
Integer Holdings exited 2024 with cash and cash equivalents of $46.5 million compared with $23.7 million at 2023-end. Total debt (including the current portion) at the end of 2024 was $990.2 million compared with $959.9 million at 2023-end.
Cumulative net cash flow from operating activities at the end of 2024 was $205.2 million compared with $180.2 million a year ago.
ITGR’s 2025 Guidance
Integer Holdings has initiated its financial outlook for 2025.
For 2025, the company expects revenues between $1,846 million and $1,880 million (implying an improvement of 8-10% from the 2024 reported figure). The Zacks Consensus Estimate is pegged at $1.85 billion.
The company expects full-year adjusted EPS in the band of $5.84-$6.20 (indicating a rise of 10-17% from the 2024 reported figure). The Zacks Consensus Estimate is pegged at $6.01.
Our Take
Integer Holdings exited the fourth quarter of 2024 with better-than-expected revenues. The strong year-over-year top-line and bottom-line performances were impressive. Strength in the majority of the product lines was encouraging. The expansion of the adjusted operating margin bodes well for the stock.
Integer Holdings continued to execute its strategy by launching new products and adding capabilities in targeted growth markets. It also completed the previously-announced acquisition of Precision Coating and signed a definitive agreement to acquire VSi Parylene, which will increase its services offering to include differentiated and proprietary coating capabilities. These developments also look promising for the stock.
However, Integer Holdings’ earnings in the reported quarter were lower than expected. The decline in Other Markets revenues was also discouraging. The contraction of the gross margin does not bode well for the stock.
Integer Holdings’ Zacks Rank and Key Picks
Integer Holdings currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Cardinal Health, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.
ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.
Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
