Wright Medical’s Q3 results top forecasts

Wright Medical (NSDQ:WMGI) yesterday beat the consensus for both sales and earnings with its third-quarter results and raised its outlook for the rest of 2018.

The Memphis-based orthopedics firm slashed its losses by -67.8% to -$42.5 million, or -38¢ per share, on sales growth of 13.8% to $194.1 million for the three months ended Sept. 30, compared with Q3 2017.

Adjusted to exclude one-time items, losses per share were -9¢, 6¢ ahead of the average estimate on Wall Street, where analysts were looking for sales of $186.1 million.

“Our team produced outstanding results across the board in the third quarter, including over 14% constant-currency net sales growth, fueled by our new product launches, ongoing rollouts and increased contributions from our sales organization. These results include continued strong performance in our U.S. upper extremities business, which grew 19% in the third quarter, driven by 21% growth in our U.S. shoulder business. We anticipate that continued penetration of our Simpliciti shoulder system, our ongoing Perform Reversed launch and accelerating adoption of our Blueprint enabling technology will continue to drive market-leading shoulder sales growth in 2018,” president & CEO Robert Palmisano said in prepared remarks. “Our U.S. lower extremities growth rate accelerated to 12% in the third quarter, driven by approximately 22% growth in total ankle and a return to market growth in our core lower extremities business. Additionally, the launch of Augment Injectable is off to a strong start and provided an excellent boost to the U.S. biologics business, which grew approximately 11% this quarter, up from 5% in the second quarter of 2018.”

Wright raised its guidance for the year, saying it now expects to report adjusted loss-per-share of -8¢ to -3¢, up from -21¢ to -14¢ previously. Full-year sales are now pegged at $825 million to $828 million, compared with prior guidance of $812 million to $822 million and excluding the impact of Wright’s $435 million acquisition of Cartiva last month.

The Cartiva deal is slated to add $7 million to the top line this year, pushing Wright’s sales guidance to $832 million to $835 million.

“With the Cartiva acquisition now closed, we significantly strengthened our market-leading lower extremities portfolio by adding Cartiva’s highly differentiated Synthetic Cartilage Implant, the first and only PMA product for the treatment of great toe osteoarthritis. Supported by compelling clinical performance and the only product of its kind backed by Level I clinical evidence, Cartiva is experiencing rapid commercial adoption and is well positioned for future growth as it addresses large markets with significant unmet needs and strong patient demand. We expect this acquisition to support our growth prospects in our core lower extremities business throughout 2019 and beyond,” Palmisano added.

WMGI shares closed up 1.0% at $27.73 apiece yesterday.

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