Back to top

Analyst Blog

On April 8, we have updated our research report on Greatbatch, Inc. (GB - Analyst Report).  We are concerned about the softness in the smaller Electrochem division and significant customer concentrations risks but remain optimistic about the company’s effort to become a provider of complete medical devices system by heavy investment on R&D.

Despite a 3.8% rise, GB’s 2013-fourth quarter earnings of 55 cents missed the Zacks Consensus Estimate by a penny. Net revenues in the quarter improved 11.0% (13% on an organic constant currency basis) to $176.6 million, which was almost in line with the Zacks Consensus Estimate of $176.0 million.

The increase in revenues was attributable to higher cardiac/neuromodulation and orthopaedic product lines sales driven by market share gains due to increased sales and marketing investment, customer product launches and the release of backlog owing to the Swiss consolidation.

These positive factors affecting revenue growth were partially offset by an 18% decline in portable medical sales due to the difficult comparable versus the year-ago quarter as well as pricing discipline, which led to a loss of some low-margin businesses.

For 2014, GB expects revenues in the range of $685 to $705 million, reflecting a 3 to 6% rise over 2013. The Zacks Consensus Estimate of $695 million for 2014 revenues lies within the guided range. The company also anticipates adjusted operating margin between 13.0 and 13.3%, reflecting a 50 to 80 bps rise from 2012.

Finally, GB expects adjusted earnings per share in the range of $2.25–$2.35, indicating a 7 to 12% rise over 2013. The Zacks Consensus Estimate of $2.33 lies within the guided range.

GB expects to grow through its efforts to develop innovative medical devices and build a healthy product pipeline. The company’s acquired complementary businesses have added new proprietary technologies, manufacturing capabilities, and development resources, apart from broadening its customer base.

However, GB faces significant customer concentration. In 2013, its top three customers, Johnson & Johnson (JNJ - Analyst Report), Medtronic, Inc. (MDT - Analyst Report), and St. Jude Medical Inc. (STJ - Analyst Report) collectively accounted for 49% of the company’s total sales

Currently GB carries a Zacks Rank #3 (Hold).

Read the Full Research Report on MDT
Read the Full Research Report on STJ
Read the Full Research Report on GB
Read the Full Research Report on JNJ

Zacks Investment Research

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
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%