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Penumbra Q3 Earnings Beat, Margins Expand, Stock Up in After Market
Penumbra, Inc. PEN reported third-quarter 2024 adjusted earnings per share (EPS) of 85 cents, which surpassed the Zacks Consensus Estimate by 23.2%. Adjusted EPS improved 26.9% year over year.
GAAP earnings were 75 cents per share, a 226% jump from the year-ago GAAP earnings of 23 cents per share.
Following the earnings announcement, shares of PEN rose 1.3% in after-market trading yesterday.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Q3 Revenues of PEN
Penumbra registered revenues of $301 million in the reported quarter, up 11.1% year over year on a reported basis and 10.9% at a constant exchange rate or CER. The figure topped the Zacks Consensus Estimate by 1%.
Penumbra’s Q3 Results in Detail
The company reports under two geographical segments — United States and International.
PEN recorded revenues of $226.3 million (75.2% of total revenues) in the United States, up 16.2% year over year on a reported basis as well as at CER.
Sales in the International segment dropped 1.9% to $74.7 million. Excluding the impact of foreign currency, the unit’s sales were down 2.5% year over year.
The company currently reports its product revenues under two categories — Thrombectomy, and Embolization and Access.
Penumbra, Inc. Price, Consensus and EPS Surprise
Penumbra, Inc. Price, Consensus and EPS Surprise
Penumbra, Inc. price-consensus-eps-surprise-chart | Penumbra, Inc. Quote
The company registered revenues of $204.1 million from sales of Thrombectomy products, up 14% on a reported basis and 13.8% at CER.
Sales of Embolization and Access products totaled $96.9 million, up 5.5% on a reported basis and 5.2% at CER.
Margin Trend
In the reported quarter, Penumbra’s gross profit improved 12.7% year over year to $200.3 million. Gross margin expanded 95 basis points to 66.5% despite an 8.1% rise in the cost of revenues.
Selling, general and administrative expenses rose 10.9% to $139.7 million. Research and development expenses totaled $25.2 million, up 20.3% year over year. Total operating expenses were $14.9 million, up 12.3% year over year.
The company reported adjusted operating margin of 11.7%, a 37-bp expansion year over year.
Financial Update
Penumbra exited the third quarter of 2024 with cash and cash equivalents and marketable investments of $291 million, compared with $339.7 million at the end of the second quarter of 2024.
Penumbra's Updated 2024 Guidance
The company reiterated its total revenue projection for 2024 in the range of $1.18-$1.20 billion.
The company narrowed its expectation for the U.S. thrombectomy franchise growth to the range of 24% to 25% year over year, compared with 23% to 25% expected previously.
The Zacks Consensus Estimate for revenues is currently pegged at $1.19 billion.
The gross margin and adjusted operating margin expansion guidance for the full year was reiterated at 100-150 and 100-200 basis points, respectively.
Our Take
Penumbra ended third-quarter 2024 with better-than-expected results, with its earnings and revenues surpassing the consensus mark. Both the geographic segments — United States and International — showed encouraging growth trends.
The quarter reflected another strong performance by the U.S. thrombectomy business driven by continued adoption and further market penetration of the current CAVT Portfolio, Lightning Flash 2.0 and Lightning Bolt 7. Among the recent developments, the company received FDA clearance for two new CAVT products, Lightning Bolt 6X and Lightning Bolt 12, which further enhance and build out an increasingly comprehensive CAVT portfolio. Despite escalations in costs and expenses, expanding margins are encouraging.
On the flip side, International revenues suffered due to a reduction in China revenues.
Zacks Rank and Key Picks
Currently, Penumbra carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Quest Diagnostics, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2024 adjusted EPS of $2.30, beating the Zacks Consensus Estimate by 1.8%. Revenues of $2.49 billion outpaced the consensus mark by 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quest Diagnostics has a long-term estimated growth rate of 6.5%. DGX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.4%.
ResMed reported first-quarter fiscal 2025 adjusted EPS of $2.20, beating the Zacks Consensus Estimate by 8.4%. Revenues of $1.22 billion surpassed the Zacks Consensus Estimate by 2.9%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 13.6%. RMD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.4%.
Boston Scientific reported third-quarter 2024 adjusted EPS of 63 cents, beating the Zacks Consensus Estimate by 8.6%. Revenues of $4.21 billion surpassed the Zacks Consensus Estimate by 4.4%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 12.6%. BSX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.3%.
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