Back to top

Analyst Blog

On Jul 9, we retained Symmetry Medical (SMA - Analyst Report) at Neutral, following its first-quarter results. Although both revenues and earnings missed estimates, the company has considerable long-term growth opportunities.

Why the Retention?

Symmetry posted a disappointing first-quarter 2013 with adjusted earnings of 4 cents a share, which missed the Zacks Consensus Estimate of 15 cents by a large margin of 73.3%. It was also lower than the year-ago adjusted EPS by 42.8%.

Revenues dropped 2% year over year to $98.9 million in the first quarter, on account of a double-digit decline in Symmetry Surgical sales, offset by decent gains in the Original Equipment Manufacturer (“OEM”) Solutions business. Revenues were lower than the Zacks Consensus Estimate of $106 million.

The company’s earnings have failed to beat the Zacks Consensus Estimates in 3 out of the last 4 quarters with an average negative surprise of 21.95%. Following the earnings release, the Zacks Consensus Estimate for 2013 plunged 49.3% to 37 cents per share and declined 7.2% to 90 cents per share for 2014.

Warsaw, IN-based Symmetry’s core OEM business is gradually showing signs of stability on the back of new products, which is encouraging.

However, Symmetry Surgical is facing sales disruptions associated with the integration of Codman surgical instruments business. This disappointing performance prompted management to lower its fiscal outlook. Symmetry needs to resolve its integration issues to avoid wastage of resources. However, we believe that long-term prospects of this business are still intact.

Moreover, uncertainty related to growth in global orthopedic procedures as well as a tight capital spending environment is affecting the business. The company’s high level of indebtedness along with currency fluctuations remain areas of concern.

Other Stocks to Consider

Medical products companies such as Resmed (RMD - Analyst Report), Hanger (HGR - Analyst Report) and Edwards Lifesciences (EW - Analyst Report) warrant a look. While Resmed carries a Zacks Rank #1 (Strong Buy), the other 2 stocks carry a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.02 +2.09%
INTEL CP INTC 35.15 +1.88%
PIPER JAFFR… PJC 54.54 +1.70%