Hill-Rom’s Q4, 2017 earnings top estimates, sales miss

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Hill-RomHill-Rom Holdings (NYSE:HRC) shares came under pressure this morning after the medical device company reported fourth-quarter and full-year results that beat Wall Street’s consensus on earnings but missed its sales forecast.

Chicago-based Hill-Rom posted profits of $69.4 million, or $1.03 per share, on sales of $643.5 million for the three months ended Sept. 30, for a bottom-line gain of 34.2% on sales growth of 5.0% compared with Q4 2016.

Adjusted to exclude one-time items, earnings per share were $1.32, 4¢ ahead of The Street, but analysts there were looking for sales of $731.1 million.

Full-year profits were $133.6 million, or 71¢ per share, on sales of $2.36 billion, amounting to 7.7% profit growth on a 4.2% sales gain. Adjusted EPS came in at $3.86, again 4¢ ahead of the consensus expectation, but analysts had forecast sales of $2.74 billion.

“Our solid financial performance and progress set a strong foundation for 2018 and beyond. We are confident in the long-term growth prospects of our company,” president & CEO John Greisch said in prepared remarks. “Our team will continue to focus on driving sustainable and profitable growth across our core portfolio, launching innovative products that address evolving customer needs, and executing cost management initiatives to create value for patients, customers and shareholders.”

Hill-Rom said it expects to report fiscal 2018 adjusted EPS of $4.22 to $4.30 on constant-currency sales growth of 2% to 3%. First-quarter adjusted EPS are pegged at 77¢ to 79¢, including a -3¢ hit from the impact of Hurricane Maria, on constant-currency sales growth of 2%.

In a separate release, Hill-Rom issued its long-term forecast for adjusted EPS growth of 10% to 12% through 2020, on annually compounded constant-currency sales growth of 3% to 4%.

“We believe Hill-Rom is well-positioned to deliver strong financial and operational performance, and attractive shareholder returns, over the next several years as we continue on our transformational journey and execute on key strategic priorities,” Greisch said. “Our commitment to generate accelerated core revenue growth and sustainable margin expansion is expected to result in double-digit adjusted earnings per share growth and significant operating cash flow through 2020,” continued Greisch. “This compelling outlook reflects continued momentum, operational execution and financial discipline as we capitalize on the attractive growth prospects across our business portfolio and advance innovation.”

HRC shares were down -3.6% to $77.11 apiece today in early trading.

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