Back to top

Analyst Blog

Life Technologies is scheduled to report its fourth-quarter and fiscal 2012 results on Monday, Feb 4, 2013, after market closes. Let’s see how things are shaping up before the announcement.

Growth Factors This Past Quarter

Life Technology’s performance has been thwarted by a sustained slowdown in government and academic research funding. Although the company does not expect the scenario to worsen in the near future, yet this global biotechnology company is repositioning for a slower growth environment by lowering the cost structure and increasing focus on R&D initiatives. Moreover, Life Technologies has consistently adopted a conservative outlook and expects the overall growth of the European region to be impacted by macroeconomic pressures through continued reductions in discretionary spending. Further worsening of the economic scenario in Europe might adversely impact the company.

However, over the last two years, the company has been focused on creating an optimal portfolio of products through innovation and acquisition, the latest being Ion Torrent. We are also encouraged by Life’s strategy to strengthen its presence in high growth geographic markets such as Latin America, the Middle East, China and India.  Over the next few years, Life’s focus on developing industry-leading franchises in high-growth technology areas, applied markets and emerging geographies will be the key drivers of long-term growth.

Earnings Whispers?

Our proven model does not conclusively show that Life Technologies is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks Earnings ESP of -0.90%: The Most Accurate Estimate stands at $1.10, while the Zacks Consensus Estimate is pegged at $1.11. This comes to a difference of -0.90%.

Zacks Rank #3 (Hold): Life Technologies’ Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. The sell rated stocks (#4 and #5) should never be considered going into an earnings announcement.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that these have the right ingredients to post an earnings beat this quarter:

Cyberonics Inc. (CYBX - Analyst Report)), Earnings ESP of +2.56% and a Zacks Rank #1 (Strong Buy)

Becton, Dickinson and Company (BDX - Analyst Report), Earnings ESP of +3.25% and a Zacks Rank #2 (Buy)

Henry Schein Inc. (HSIC - Analyst Report), Earnings ESP of +0.83% and a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

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 Zacks.com. 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
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%