Tax cuts push Teleflex into the red as Q4 revenues miss

Teleflex (NYSE:TFX) put red ink into the ledger during the fourth quarter, thanks to a $108 million hit from the tax reforms enacted last year, and missed the consensus expectation for the top line.

Wayne, Pa.-based Teleflex reported losses of -$42.7 million, or -91¢ per share, on sales of $595.1 million for the three months ended Dec. 31, 2017, for sales growth of 15.8% and profits of $61.1 million for Q4 2016.

Adjusted to exclude the $107.9 million tax hit and other one-time items, earnings per share were $2.44, 4¢ ahead of the forecast on Wall Street, where analysts were looking for sales of $601.2 million.

The tax hit also pushed full-year earnings lower, to $152.5 million, or $3.27 per share, on sales of $2.15 billion, for a -35.7% bottom-line slide on sales growth of 14.9% compared with 2016. Adjusted EPS came in at $8.40, again 4¢ ahead of The Street and its $2.15 billion sales outlook.

“Despite modestly softer than expected sales in the fourth quarter, due in part to Vascular Solutions distributor go-directs within EMEA, we reported solid gross and operating margin performance in the period and delivered full year adjusted earnings per share results at the high-end of our guidance range. Following our acquisition of NeoTract, the business continues to perform at a high level, with UroLift experiencing deeper penetration of the BPH market. UroLift delivered $39 million in revenues for the fourth quarter, which represented growth of 121% year-over-year, and we remain excited about the long-term contributions the business will make to our revenue growth and margin profile,” president & CEO Liam Kelly said in prepared remarks. “As we look into 2018, our new product launches, our acquisitions of Vascular Solutions and NeoTract, and gross and operating margin expansion programs give us confidence we can deliver double digit constant currency revenue growth and significant adjusted earnings per share expansion.”

Teleflex said it expects to put up adjusted EPS of $9.55 to $9.75 this year on constant-currency sales growth of 12% to 13%.

TFX shares were flat in pre-market trading at $270.03 apiece today.

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