Teleflex shares dip on Q4, 2018 earnings release, restructuring announcement

Shares in Teleflex (NYSE:TFX) have fallen today after the medical device maker released fourth quarter and full year 2018 earnings mostly in line with analysts expectations, as well as a 3-year, $56 million restructuring plan.

The Wayne, Penn.-based company posted profits of approximately $90.6 million, or $1.93 per share, on sales of $641.6 million for the three months ended December 31, seeing a swing from red ink on the bottom line while sales grew 7.8% compared with the same period during the previous year.

Adjusted to exclude one-time items, earnings per share were $2.77, just ahead of the $2.76 consensus on Wall Street where analysts expected to see sales of approximately $640.1 million, which the company topped.

For the full year, Teleflex posted profits of $200.8 million, or $4.29 per share, on sales of approximately $2.45 billion, for bottom-line growth of 31.6% while sales grew 14.1% compared with the previous year.

After adjusting to exclude one-time items, earnings per share were $9.90, just ahead of the $9.89 consensus on Wall Street, where analysts expected to see sales of $2.45 billion, which the company met.

“The fourth quarter of 2018 marks the close of a strong year for Teleflex, led by robust revenue growth in interventional urology and interventional access, as well as many of our legacy product lines. Interventional urology revenues for the full year 2018 were $196.7 million, an increase of nearly 57%, reflecting continued physician adoption of the UroLift system and expanding patient awareness of minimally invasive treatments for BPH. In addition, during 2018 the company generated significant earnings growth, due in part to continued execution of our ongoing restructuring initiatives. As we look forward to 2019, we are confident that our expanding global product portfolio will improve the lives of more patients. We expect to deliver another year of robust revenue growth, margin expansion and adjusted earnings growth, all while investing in our growth businesses to sustain our growth and profitability profile over the long term,” prez & CEO Liam Kelly said in a press release.

The company also announced a restructuring plan looking to relocate manufacturing operations to lower-cost locations and eliminate a number of jobs. The plan is expected to be completed by 2022, and includes costs of $56 million to $70 million, with $19 million to $23 million of that slated to cover termination benefits.

“We expect to begin realizing plan-related savings in 2021 and expect to achieve annual pre-tax savings of $12 million to $14 million once the plane is fully implemented,” Teleflex said in a prepared statement.

Teleflex also released guidance for the 2019 year, expecting to see sales growth of between 5% and 6%, with adjusted diluted EPS of between $10.90 and $11.10.

Shares in Teleflex have fallen approximately 3.8% so far today, at $275.68 as of 10:46 a.m. EST.

Earlier this month, Teleflex said that it won FDA premarket approval for its Manta vascular closure device, touting it as the first such device specifically designed for large bore femoral access site closures.