The 10-second takeaway
For the quarter ended June 30 (Q3), SurModics missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew significantly.
Gross margins shrank, operating margins dropped, net margins were steady.
SurModics notched revenue of $14.3 million. The two analysts polled by S&P Capital IQ hoped for revenue of $15.0 million on the same basis. GAAP reported sales were 2.4% higher than the prior-year quarter's $14.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.22. The two earnings estimates compiled by S&P Capital IQ predicted $0.21 per share. Non-GAAP EPS of $0.22 for Q3 were 29% higher than the prior-year quarter's $0.17 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.) GAAP EPS of $0.21 for Q3 were 24% higher than the prior-year quarter's $0.17 per share. (The prior-year quarter included -$0.01 per share in earnings from discontinued operations.)
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 58.0%, 80 basis points worse than the prior-year quarter. Operating margin was 29.7%, 460 basis points worse than the prior-year quarter. Net margin was 21.9%, much about the same as the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $15.0 million. On the bottom line, the average EPS estimate is $0.21.
Next year's average estimate for revenue is $57.6 million. The average EPS estimate is $0.99.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 70 members out of 91 rating the stock outperform, and 21 members rating it underperform. Among 28 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 21 give SurModics a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on SurModics is outperform, with an average price target of $29.63.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.