Here are three stocks with buy rank and strong value characteristics for investors to consider today, February 12:Xerox Holdings Corporation (XRX) : This workplace technology company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 16.4% over the last 60 days.Xerox Holdings Corporation has a price-to-earnings ratio (P/E) of 8.99 compared with 12.40 for the industry. The company possesses a Value Score of A.Embecta Corp. (EMBC) : This medical de ...

Shares of Embecta (EMBC.V -14.58%) were tanking on Friday, falling 13% lower as of 10:54 a.m. ET. The decline came after the diabetes care company reported its fiscal year 2024 first-quarter results.Despite the big sell-off, Embecta reported positive Q1 results. The company generated revenue in the quarter of $277.3 million, up 0.6% year over year and better than the average analysts' estimate of $264.9 million.Embecta also posted earnings of $20.1 million, or $0.35 per share, based on generally accepted ac ...

Financial Data and Key Metrics Changes - In Q1, the company generated revenue of $277.3 million, representing an increase of 0.6% on an as-reported basis and a decline of 0.3% on a constant currency basis [4] - GAAP gross profit for Q1 was $185.9 million with a margin of 67%, compared to $188.8 million and 68.5% in the prior year [6] - GAAP net income for Q1 was $20.1 million, down from $35.2 million in the prior year, with diluted earnings per share of $0.35 compared to $0.61 [7] - Adjusted EBITDA for Q1 totaled approximately $90.4 million with a margin of 32.6%, down from $110.2 million and 40% in the prior year [7] Business Line Data and Key Metrics Changes - The core injection business grew by 0.5% on a constant currency basis when normalizing for non-diabetes products [4] - The insulin patch pump program has seen significant advancements, including the submission of a 510(k) application for the open loop version to the FDA [3] Market Data and Key Metrics Changes - Revenue in the US totaled $148.6 million, representing a year-over-year decline of approximately 0.5%, while international revenue was $128.7 million, equating to flat year-over-year constant currency growth [59] Company Strategy and Development Direction - The company is focused on three strategic priorities: strengthening the base business in insulin injection devices, thoughtful separation from the former parent company, and investing in growth, particularly in the insulin patch pump program [42] - The company plans to implement its ERP system and shared services capabilities in additional markets, aiming for over 85% of revenue base on its own ERP platform by the end of Q2 [56] Management's Comments on Operating Environment and Future Outlook - Management noted that while they have generally avoided major disruptions during the transition away from TSAs with BD, there is a possibility of temporary sales disruptions in specific countries [2] - The company reaffirmed its full-year 2024 financial guidance, expecting revenue to be flat to down 2% compared to 2023, with a focus on mitigating risks associated with the ERP transition [8] Other Important Information - The company has completed the legal entity transfer for its Suzhou, China manufacturing facility and anticipates resuming domestic production for the Chinese market in Q2 [57] - The company is increasing its adjusted earnings per share guidance from a range of $1.90 - $2.10 to $1.95 - $2.15 due to improvements in foreign exchange rates [47] Q&A Session Summary Question: Feedback from FDA on patch pumps and timing of approval - Management indicated that the review process is underway and they are in communication with the FDA, but they cannot comment on timing [11][54] Question: Constant currency growth expectations for the US versus internationally - Management expects growth outside the US to exceed that of the US, with international markets growing in the mid-single-digit range [23] Question: Plans for commercialization of the open-loop patch pump - The company plans a limited market release of the open-loop pump, dependent on FDA approval timing [17] Question: Clarification on ERP transition and customer ordering patterns - Management explained that customers often place orders in advance during ERP transitions to avoid stock-outs, leading to some lumpiness in orders [24][26] Question: Production environment for patch pumps and CapEx plans - The company is working with a contract manufacturer for production and has established a pilot production line, with total CapEx expected to be between $50 million to $60 million for 2024 [31][69]

Embecta Corp. (EMBC) came out with quarterly earnings of $0.61 per share, beating the Zacks Consensus Estimate of $0.45 per share. This compares to earnings of $0.96 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 35.56%. A quarter ago, it was expected that this company would post earnings of $0.42 per share when it actually produced earnings of $0.59, delivering a surprise of 40.48%.Over the last four quarters, the company ha ...

PARSIPPANY, N.J., Feb. 09, 2024 (GLOBE NEWSWIRE) -- Embecta Corp. ("embecta" or the "Company") (NASDAQ:EMBC), a global diabetes care company, today reported financial results for the three month period ended December 31, 2023. "Building on our performance during 2023, embecta delivered strong results for the first quarter of 2024," said Devdatt (Dev) Kurdikar, Chief Executive Officer of embecta. "During the first quarter, I am pleased to report that we transitioned approximately sixty percent of our revenue ...

PARSIPPANY, N.J., Feb. 09, 2024 (GLOBE NEWSWIRE) -- The Board of Directors of Embecta Corp. ("embecta") (NASDAQ:EMBC) has declared a quarterly cash dividend of $0.15 for each issued and outstanding share of the Company's common stock. The dividend is payable on March 15, 2024 to stockholders of record at the close of business on February 28, 2024. About embecta embecta is a global diabetes care company that is leveraging its nearly 100-year legacy in insulin delivery to empower people with diabetes to live ...

Financial Performance - Revenues for the three months ended December 31, 2023, increased by $1.6 million, or 0.6%, to $277.3 million compared to $275.7 million in the same period of 2022[108] - Gross profit decreased by $2.9 million to $185.9 million, with gross profit as a percentage of revenue at 67.0%, down from 68.5% in the prior year[109] - Operating income fell by $43.3 million to $45.5 million, a decrease of 48.8% compared to the previous year[107] - Net income decreased by $15.1 million to $20.1 million, representing a decline of 42.9% from $35.2 million in the prior year[109] Expenses - Selling and administrative expenses rose by $17.5 million, or 24.0%, to $90.3 million, primarily due to increased compensation and benefits costs[111] - Research and development expenses increased by $3.3 million, or 19.5%, to $20.2 million, driven by spending on the insulin patch pump platform[112] - Cost of products sold increased by $4.5 million, or 5.2%, to $91.4 million, with costs as a percentage of revenues rising to 33.0% from 31.5%[110] Debt and Interest - As of December 31, 2023, total principal debt issued by Embecta is $1,633.4 million, with long-term debt amounting to $1,592.9 million[119] - Interest expense, net increased by $2.1 million to $27.7 million, primarily due to higher interest rates on variable rate debt[115] - The weighted average cost of total debt is 7.2%, with short-term debt representing 0.6% of total debt as of December 31, 2023[119] - The interest rate on the Term Loan is set at 300 basis points over SOFR, with a 0.50% SOFR floor[141] - A 100 basis points change in interest rates would impact interest expense on the Term Loan by $9.3 million annually[141] - The company is subject to risks related to changes in SOFR for any borrowings on the revolving credit facility[141] Cash Flow and Liquidity - Cash and cash equivalents decreased from $326.5 million as of September 30, 2023, to $298.7 million as of December 31, 2023, a reduction of $27.8 million[124] - Net cash used for operating activities was $13.1 million, primarily due to changes in trade receivables, which decreased by $78.6 million[124] - The company expects to convert outstanding trade receivables into cash during fiscal 2024 in line with contractual payment terms[126] Taxation - The effective tax rate was (40.6)% for the three months ended December 31, 2023, a decrease from 37.3% in the prior year, influenced by a tax benefit related to changes in Swiss tax law[117] Market Conditions - The company continues to face pricing pressures and increased competition in the medical device industry, impacting operating margins[96] Capital Expenditures and Obligations - Capital expenditures for the three months ended December 31, 2023, were $2.7 million, supporting further business expansion[131] - Lease obligations total $81.3 million, with significant payments due in the years following 2028[121] Credit Ratings - Moody's and S&P maintained credit ratings of Ba3 and B+, respectively, unchanged since January 2022[124] Inventory and Receivables - The change in inventories was driven by product sales of certain inventory levels built up in anticipation of the North America ERP system going live in November 2023[127] - The company is now responsible for the collection of outstanding trade receivables in the U.S. following the termination of a portion of the Factoring Agreement with BD[123]

PARSIPPANY, N.J., Feb. 07, 2024 (GLOBE NEWSWIRE) -- Embecta Corp. (embecta) (NASDAQ:EMBC) today announced that management will host one-on-one investor meetings on Tuesday, February 13, 2024, at the Cliff Lodge, Snowbird, UT. About embecta embecta is a global diabetes care company that is leveraging its 100-year legacy in insulin delivery to empower people with diabetes to live their best life through innovative solutions, partnerships and the passion of more than 2,000 employees around the globe. For more ...

Financial Performance - Revenue for the year ended September 30, 2023, decreased by $8.7 million, or 0.8%, to $1,120.8 million from $1,129.5 million in 2022[196] - Gross profit decreased by $25.0 million to $749.9 million, with gross profit as a percentage of revenue at 66.9%, down from 68.6% in the prior year[195] - Operating income decreased by $88.1 million to $221.5 million from $309.6 million[195] - Net income decreased by $153.2 million to $70.4 million from $223.6 million, resulting in a diluted net income per share of $1.22 compared to $3.89 in the previous year[194][195] Expenses - Cost of products sold increased by $16.3 million, or 4.6%, to $370.9 million, with cost of products sold as a percentage of revenues rising to 33.1% from 31.4%[198] - Selling and administrative expenses increased by $46.5 million, or 15.8%, to $341.3 million, primarily due to increased compensation and benefit costs[200] - Research and development expenses increased by $18.3 million, or 27.4%, to $85.2 million, attributed to investments in new products[202] - Other operating expenses rose to $99.4 million from $44.7 million, primarily related to accounting, auditing, and legal services[206] Foreign Currency and Geopolitical Impact - The company faced a $26.5 million negative impact on revenues due to foreign currency translation from the strengthening of the U.S. dollar[196] - The company continues to monitor geopolitical conflicts, including the situation in Ukraine and Israel, with no material impact on operations reported as of November 29, 2023[192] Interest and Taxation - Interest expense increased to $107.0 million for the year ended September 30, 2023, from $46.2 million in 2022, primarily due to longer debt outstanding and higher interest rates[207] - Other income (expense), net decreased by $2.0 million to $(8.8) million for the year ended September 30, 2023, compared to $(6.8) million in 2022[208] - The effective income tax rate increased due to a valuation allowance against interest expense carryforwards and higher U.S. tax on foreign earnings[209] - As of September 30, 2023, the company recorded deferred taxes on undistributed earnings of foreign subsidiaries, with an anticipated $18.0 million reduction in income tax expense in fiscal year 2024[210][211] Cash Flow and Debt - Cash and cash equivalents were $326.5 million as of September 30, 2023, a decrease from $330.9 million in 2022, with net cash provided by operating activities at $67.7 million[225] - Net cash used for investing activities was primarily $26.5 million for capital expenditures to support business expansion[226] - Total principal debt outstanding as of September 30, 2023, was $1,635.8 million, with long-term debt at $1,593.9 million[218] - The weighted average cost of total debt was 7.1% as of September 30, 2023, with short-term debt representing 0.6% of total debt[219] Contracts and Obligations - The company has contractual obligations of approximately $227 million for purchase obligations and $82 million for lease obligations as of September 30, 2023[228] - The company entered into a lease agreement for approximately 278,000 square feet of manufacturing space for an initial term of ten years[220] Tax and Accounting Practices - The company incurs stock-based compensation expenses over the requisite service period based on the grant date fair value of awards, utilizing the Black-Scholes-Merton option-pricing model[232] - The company recognizes deferred tax assets and liabilities for expected future tax consequences of temporary differences between financial statements and tax basis of assets and liabilities[233] - The company evaluates factors such as prior earnings history and expected future earnings to determine the necessity of valuation allowances for deferred tax assets[234] - The company establishes reserves for uncertain tax positions based on its interpretation of tax laws and regulations, recognizing interest and penalties as part of income tax expense when applicable[236] Risks and Challenges - The company is exposed to foreign currency exchange risks that could adversely affect its financial condition and results of operations[243] - As of September 30, 2023, the company's Term Loan interest rate is set at 300 basis points over SOFR, with a 100 basis points change impacting interest expense by $9.4 million annually[246] - The company faces risks related to competitive factors, including new drug therapies for diabetes and pricing pressures from lower-cost producers[240] - The company may encounter challenges in completing strategic partnerships and acquisitions that could accelerate growth and access innovative technologies[246] - The company is subject to risks from changes in laws and regulations affecting its domestic and foreign operations, including healthcare and tax policies[246] - The company acknowledges that actual results may differ materially from forward-looking statements due to various risks and uncertainties[241]

Embecta Corp. (NASDAQ:EMBC) Q4 2023 Results Conference Call November 21, 2023 7:00 AM ET Company Participants Pravesh Khandelwal - Vice President of Investor Relations Dev Kurdikar - Chief Executive Officer Jake Elguicze - Chief Financial Officer Conference Call Participants Marie Thibault - BTIG Mike Polark - Wolfe Research Operator Welcome, ladies and gentlemen, to the Fiscal Fourth Quarter and Full Year 2023 embecta Earnings Conference Call. at this time, all participants have been placed in a listen-onl ...