Hillrom Q3 Earnings Exceed Expectations As Demand Rebounds To Pre-COVID Levels

Hillrom Holdings Inc HRC Q3 adjusted EPS of $1.38 beat the consensus of $1.34, exceeded the Company's previously issued guidance range of $1.32 to $1.36.
Q3 results reflect a difficult comparison to Q3 2020, which benefited from a surge in one-time COVID-related revenue of approximately $130 million and adjusted EPS of $0.60.
Revenue decreased 6% Y/Y to $718 million on a reported basis and 9% on a constant currency (CC) basis. Excluding last year's one-time COVID-related revenue of Med-Surg and ICU bed systems and non-invasive ventilators, revenues are up 13% on a reported basis and 10% on a constant currency basis.
Patient Support Systems revenue of $376 million declined 16% (18% CC); excluding COVID-related revenue, the segment witnessed an 11% jump in sales (9% CC), reflecting normalized demand for bed systems & rentals.
Front Line Care's revenue of $266 million increased 6% (3% CC), the revenue increased 17% (14% CC) without ventilator orders as physician office visits return to pre-COVID levels.
Surgical Solutions' revenue was up 12% (8% CC) to $76 million, driven by an upturn in demand for operating room tables and patient positioning products as surgical procedures rebound.
Outlook: For FY21, Hillrom raised revenue outlook to increase 3% - 4%, with adjusted EPS of $6.08 to $6.12 (consensus $6.06), compared to previous guidance of 1% - 3% growth and adjusted earnings of $6.00 - $6.10.
It expects Q4 sales to increase by 6% - 7% and adjusted EPS of $1.44 to $1.48.
Recently, Hillrom stock gained on reports of Baxter in initial talks to acquire the Company.
Price Action: HRC shares closed at $136.86 on Thursday.

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