Greatbatch Inc. GB reported adjusted earnings of 34 cents per share in the first quarter of 2016, which plunged 47.7% from the year-ago quarter.Greatbatch completed Nuvectra NVTR spin-off on Mar 14. Notably, the first-quarter 2016 results exclude Nuvectra figures but include the results from Lake Region Medical (acquired in Oct 2015).After adjusting for these effects (comparable basis), adjusted earnings were 42 cents per share, down 41% from the year-ago quarter and below the Zacks Consensus Estimate of 51 cents. Greatbatch Inc. - Earnings Surprise | FindTheBestSales surged 106% year over year to $332.2 million. On a comparable basis and at constant currency (cc), sales declined 7% year over year to $331.1 million in the first quarter which lagged the Zacks Consensus Estimate of $339 million.Segment DetailsPost the Lake Region Medical acquisition, Greatbatch realigned its product line into four categories – (1) Advanced Surgical, Orthopedics, and Portable Medical, (2) Cardio and Vascular, (3) Cardiac/Neuromodulation, and (4) Electrochem.Advanced Surgical, Orthopedics, and Portable Medical includes the legacy Greatbatch Orthopedics and Portable Medical product line in addition to the legacy Lake Region Medical Advanced Surgical product line. On a comparable basis and at cc, sales decreased 14% to $91.3 million due to lower order growth and higher price concessions.Cardio and Vascular includes the Vascular product line and the Lake Region Medical Cardio and Vascular sales. On a comparable basis and at cc, sales declined 3% to $133.7 million. The decline can be primarily attributed to inventory adjustments at some specific customers.Cardiac/Neuromodulation products include the legacy Greatbatch Cardiac/Neuromodulation segment and QiG in addition to the legacy Lake Region Medical Cardiac/Neuromodulation segment. On a comparable basis and at cc, sales declined 3% to $95.9 million. Apart from inventory adjustments at some specific customers, price concessions and continuing impact of the runoff of end of life products hurt segmental sales.Electrochem includes the legacy Greatbatch Energy, Military and Environmental product lines. On a comparable basis and at cc, sales plunged 34% to $11.7 million, primarily due to the continued impact of the slowdown in the energy markets, which has caused customers to reduce drilling, pipeline inspection and exploration volumes.Operational DetailsGross margin contracted 490 basis points (bps) on a year-over-year basis to 27.5% in the reported quarter.Selling, general and administrative (SG&A) expenses, as percentage of sales, declined 140 bps to 12.6%. Greatbatch realized approximately $5 million of cost synergies during the quarter, which is expected to ramp up as the year progresses.Research and Development (R&D) expenses, as percentage of sales, declined 260 bps to 5.2% in the quarter.Adjusted EBITDA margin (on a comparable basis) contracted 40 bps to 19.7% in the reported quarter.GuidanceFor the second quarter of 2016, Greatbatch expect sales in the range of $355 million to $360 million, up $24--$29 million sequentially. Higher orders in portable medical, orthopedic, and cardiac rhythm management and vascular business categories coupled with new product launches addressing arthroscopic and electro specialty applications are expected to drive the sequential growth.Greatbatch reiterated its full-year 2016 guidance. Sales are projected in the range of $1.425 billion to $1.475 billion. Adjusted EBITDA is expected to be in the range of $320 million to $335 million. Adjusted earnings are forecasted in the band of $3.00 to $3.35 per share.Greatbatch expects slowdown in the energy markets to continue to impact year-over-year comparables in the second quarter of 2016. However, this is expected to have lesser impact in the second half of 2016 reflecting the reductions of inventory and reduced orders that occurred in the second half of 2015.Management believes that the impact of the downturn in the energy markets on its business has bottomed, but does not expect a rebound in Electrochem business until at least 2017.Greatbatch also noted that it is on track to achieve at least $25 million in annual synergies for 2016, which is expected to increase to at least a $60 million annual run rate by 2018.Zacks Rank & Key PicksCurrently, Greatbatch carries a Zacks Rank #5 (Strong Sell).Better-ranked stocks in the industry include Edwards Lifesciences EW and IRadimed IRMD. Both the stocks sport a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report IRADIMED CORP (IRMD): Free Stock Analysis Report EDWARDS LIFESCI (EW): Free Stock Analysis Report GREATBATCH INC (GB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research