Globus Medical, Inc. GMED reported first-quarter 2025 adjusted earnings per share (EPS) of 68 cents, which missed the Zacks Consensus Estimate by 8.1%. The figure increased 7.9% year over year.
The adjusted EPS excludes certain non-recurring expenses and benefits, such as the amortization of intangibles, merger and acquisition-related costs/licensing and the provision for litigation.
Without adjustments, the company registered a GAAP diluted EPS of 54 cents compared to a loss of 5 cents per share in the year-ago period.
Following the earnings announcement, GMED stock fell 23% last Friday.
GMED’s Q1 Revenues
Worldwide sales decreased 1.4% year over year to $598.1 million. The reported figure missed the Zacks Consensus Estimate by 4.8%.
Net sales decline was due to lower enabling technology unit sales.
GMED’s Q1 Geographic Details
Net sales generated in the United States increased 0.2% year over year (same at CER) to $483.9 million, which missed our model’s projection of $519.2 million.
Across international markets, revenues decreased 7.7% (down 4.6% at CER) to $114.3 million, which also missed our model estimate of $124.6 million.
GMED’s Product-Wise Q1 Sales
Musculoskeletal Solutions generated revenues of $575.9 million, up 0.2% year over year. Our model projected $597.1 million in sales for this segment.
Enabling Technologies generated revenues of $22.2 million, down 30.6% from the prior-year reported figure. The reported figure also missed our model estimate of $46.7 million. (See the Zacks Earnings Calendar to stay ahead of market-making news).
GMED’s Q1 Margin Performance
The gross profit in the reported quarter rose 10.3% year over year to $402.7 million. However, the gross margin expanded 714 basis points (bps) to 67.3% on a 19.1% decrease in the cost of sales (exclusive of amortization of intangibles).
SG&A expenses totaled $242.8 million, down 2.4% from the year-ago quarter’s level. Research and development expenses decreased 42.3% to $33.1 million.
The adjusted operating profit was $126.9 million, which rose 114.2% from the year-ago figure of $59.2 million. The adjusted operating margin surged 1145 bps to 21.2% due to lower operating expenses.
GMED’s Cash Position
Globus Medical exited the first quarter of 2025 with combined cash and cash equivalents and short-term marketable securities of $461.3 million compared with $890.1 million at the end of the fourth quarter of 2024.
Globus Medical, Inc. Price and Consensus
Globus Medical, Inc. Price and Consensus
Globus Medical, Inc. price-consensus-chart | Globus Medical, Inc. Quote
Net cash provided by operating activities at the end of the first quarter was $177.3 million compared with the year-ago figure of $52.4 million.
GMED’s 2025 Guidance
Globus Medical has reaffirmed its full-year 2025 net sales guidance. For 2025, net sales are projected to be in the range of $2.80-$2.90 billion. The Zacks Consensus Estimate is currently pegged at $2.68 billion.
The company lowered its adjusted EPS guidance to $3.00-$3.30 from $3.10-$3.40. The Zacks Consensus Estimate is pegged at $3.32.
Our Take on GMED
Globus Medical exited the first quarter of 2025 with lower-than-expected results, with both earnings and revenues missing their respective estimates. The performance was affected by softer Enabling Technology deal closures, temporary integration-related supply-chain disruption, and the timing of international distributor orders.
On the other hand, GMED introduced two innovative new products — the COHERE ALIF Spacer and Modulus ALIF Blades. Furthermore, the robust expansion of margins in the quarter is highly encouraging.
Meanwhile, the company’s lowered 2025 EPS guidance adds to the worry.
GMED’s Zacks Rank & Key Picks
GMED currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are AngioDynamics ANGO, Integer Holdings Corporation ITGR and Boston Scientific BSX.
AngioDynamics, currently sporting a Zacks Rank #1 (Strong Buy), reported a third-quarter fiscal 2025 adjusted EPS of 3 cents against the Zacks Consensus Estimate of a loss of 13 cents. Revenues of $72 million beat the Zacks Consensus Estimate by 2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ANGO has an estimated fiscal 2026 earnings growth rate of 27.8% compared with the S&P 500 composite’s 10.5%. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 70.9%.
Integer Holdings, sporting a Zacks Rank #1 at present, posted a first-quarter 2025 adjusted EPS of $1.31, which outpaced the Zacks Consensus Estimate by 3.1%. Revenues of $437.4 million surpassed the Zacks Consensus Estimate by 1.3%.
ITGR has an estimated long-term earnings growth rate of 20.8% compared with the industry’s 14.3%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed on one occasion, the average surprise being 2.8%.
Boston Scientific, currently carrying a Zacks Rank #2 (Buy), reported a first-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 11.9%. Revenues of $4.66 billion topped the Zacks Consensus Estimate by 2.3%.
BSX has an estimated 2025 earnings growth rate of 15.9% compared with the S&P 500 composite’s 11.9%. The company’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.8%.
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