What happened
Shares of Globus Medical (GMED +1.01%) were soaring 13.9% higher as of 3:21 p.m. EDT on Thursday. The big jump came after the medical device maker reported its second-quarter results before the market opened.
So what
Globus Medical announced revenue in the second quarter of $148.9 million, down 23.4% year over year. It posted a net loss in Q2 of $20.8 million, or $0.21 per share, based on generally accepted accounting principles (GAAP). That reflected a sharp decline from GAAP earnings of $38.2 million, or $0.38 per share, in the prior-year period. However, the company reported adjusted earnings of $0.07 per share.
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So why did the healthcare stock surge with year-over-year declines on both the top and bottom lines? Globus blew past expectations. It topped the consensus Wall Street estimate for revenue in Q2 by more than 49%. The company's adjusted earnings were nearly 164% better than expected.
Lower sales and earnings in the second quarter were a foregone conclusion for Globus Medical with the COVID-19 pandemic causing patients to delay elective procedures. However, in a statement, CEO Dave Demski said the 23% revenue decline as "an exceptional result when compared to our peers within the industry."
Now what
Globus Medical should return to growth soon. Demski said that the company's manufacturing has continued at a record pace "in anticipation of the bounce back we are already starting to see." He noted that U.S. spine procedures are rebounding after hitting bottom in mid-April. Demski added that "Globus is poised for robust growth if the recent trends continue."
