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Larger Health Firms Report Mixed Q1 Results

The afternoon of Wednesday, May 3, erupted with a deluge of earnings—mostly positive—among local health companies.

Within a nine-minute span, five Orange County-based companies—all with a market cap topping $2 billion—reported first-quarter results. Three of the five boosted their annual revenue guidance.

Here’s a quick roundup:

Glaukos

Wall Street reacted most favorably to Glaukos Corp. (NYSE: GKOS) as its shares climbed 8.9% to $50.57 and a $2.4 billion market cap.

The Aliso Viejo-based maker of medical devices to treat glaucoma reported first-quarter sales rose 9% to $73.9 million, easily topping the $67.7 million expected by analysts.

“I’m pleased with our strong start to the year highlighted by a return to solid topline growth in the first quarter, reflecting the execution of our commercial strategies thus far in 2023,” Chairman and CEO Thomas Burns said.

It boosted its annual forecast to $295 million to $300 million, topping the $293.5 million analysts expected.

Envista

Envista Holdings Corp. (NYSE: NVST), a Brea-based maker of dental equipment, took the biggest hit to its valuation after it reported first-quarter sales declined 0.7% to $627.2 million, missing the analyst consensus for $632.5 million.

The company said it’s facing “challenges” in China and Russia and higher interest rates are causing customers to delay purchases of Envista’s large capital equipment.

“Despite a volatile macro backdrop, we continue to make progress against our long-term strategic priorities of accelerating growth, expanding operating margins, and transforming our portfolio,” Chief Executive Amir Aghdaei said in a statement. “As we move throughout 2023, we expect our growth to accelerate and operating margins to expand.”

After the report, shares fell 6.9% to $35.06 and a $5.7 billion market cap.

Sabra

Irvine-based Sabra Health Care REIT Inc. (Nasdaq: SBRA), which specializes in skilled nursing homes and senior housing, told investors it’s still recovering from the effects of the pandemic.

“All in all, we anticipate a relatively quiet year, positioning us to constructively move forward as the industry continues to recover from the pandemic,” CEO Rick Matros said.

“Labor challenges still hamper the speed of recovery; however, we are seeing improved labor trends, albeit slowly.”

It reported first-quarter adjusted funds from operation, a metric typically used for real estate investment trusts, fell 14% to $78 million. After the report, its shares declined 2.1% to $11.10 and a $2.6 billion market cap.

Inari

Irvine’s Inari Medical Inc. (Nasdaq: NARI) generated first-quarter revenue of $116.2 million, up 34% over the same quarter last year and topping the $110.3 million expected by analysts.

“Our strong financial performance in the first quarter reflected consistent execution across all of our growth drivers,” CEO Drew Hykes said. “We also received FDA clearance for several new products that will drive market expansion while further distancing Inari from both existing and future competition.”

It boosted its 2023 revenue guidance by $8 million to $478 million to $488 million.

However, investors didn’t react much initially, as the company’s shares were unchanged at $62.70 and a $3.5 billion market cap.

Staar

Staar Surgical Co. (Nasdaq: STAA) reported sales climbed 16% to $73.5 million, topping the $67 million consensus of analysts. It raised its annual forecast to $348 million, up $8 million.

“Staar’s performance in the first quarter demonstrates the global strength of our business … as surgeons and patients seeking visual freedom from glasses and contact lenses increasingly make our EVO ICL lenses their first choice,” CEO Tom Frinzi said.

Frinzi, like Inari’s Hykes, recently took over the CEO role at their respective companies.
Staar, unlike Inari, took a hit to its stock after the earnings report. Shares declined 7.8% to $64.64 and a $3.1 billion market cap.

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