Orthodontic and GP dental medical device maker Align Technology Inc. (ALGN:NASDAQ) yesterday announced second quarter earnings ended June 30, 2019. The firm reported total revenues in Q2/19 were $600.7 million, up 22.5% year-over-year. Operating income in Q2/19 was $176.5 million, up 43.8% year-over-year, resulting in an operating margin of 29.4% and a net profit of $147.1 million in the quarter, or $1.83 per diluted earnings per share (EPS). The firm noted that Q2/19 operating expense included a $51 million benefit from the ClearCorrect settlement with Straumann, which increased Q2/19 operating margin by approximately 8 points and benefited EPS by $0.57.
Invisalign volume in Q2/19 was 377,000 cases, up 24.6% year-over-year, composed of 16% growth in the Americas and 36.7% in international regions. Invisalign volume for teenage patients in Q2/19 was 103,700 cases, up 32.2% year-over-year, and Q2/19 scanner and services revenues were $104.0 million, up 82.4% year-over-year.
Align Technology President and CEO Joe Hogan said, "Our Q2/19 revenues were at the high-end of our guidance, reflecting Invisalign volume growth primarily from international doctors, as well as very strong sales from iTero scanner and services with Q2/19 Invisalign volumes up 24.6% year-over-year. . .In Q2/19, total Invisalign case shipments were lower than expected, primarily due to a softness in China related to a tougher consumer environment and slower growth in young adult case in North America...given the uncertainty in China, our outlook for Q3/19 reflects a more cautious view for growth in the Asia Pacific region."
The company further provided guidance for Q3/19 for Net revenues in the range of $585 million to $600 million, up approximately 16%-19% over Q3/18 and Diluted EPS in the range of $1.09 to $1.16. Align also stated in the outlook that it expects to repurchase at least $100 million of its stock (shares) in the open market in Q3/19.
Align Technology is a medical device company that designs, manufactures and markets the Invisalign system, which according to the company is the world's leading invisible orthodontic product,and and the iTero Intraoral scanning systems and services. The Invisalign system and iTero Intraoral scanning system and OrthoCAD digital services are available to general practitioner dentists, orthodontists and other dental specialists, and the firm provides training, clinical education programs and the tools needed for dental industry adoption.
Align's Clear Aligner segment consists of its Invisalign System, Express/Lite (Non-Comprehensive Products) and Vivera Retainers, along with its training and ancillary products for treating malocclusion (Non-Case). The firm's Scanner and Services segment consists of intra-oral scanning systems and other services available with the intra-oral scanners that provide digital alternatives to the traditional cast models and includes its iTero scanner and OrthoCAD.
ALGN shares opened much lower today at $219.28 (-$55.88, -20.63%) from yesterday's closing price of $275.16, and traded down more than 25%, closing at $200.90 (-$74.26, -26.99%).
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