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Medical Device Stocks Earnings on Feb 2: IDXX, ABC & ALGN
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The Q4 reporting cycle has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), and the quarterly performance has been stable so far. As per latest trends, the Medical sector’s earnings growth is expected to be one of the strongest among the seven top-performing sectors.
Per the latest Earnings Preview, 8.9% of the companies in the Medical sector, constituting nearly 29.2% of the sector’s market capitalization, reported earnings till Jan 26. Earnings increased 27% year over year on 12.2% higher revenues. A total of 40% of the companies’ earnings as well as revenues beat the Zacks Consensus Estimate.
Though the scorecard so far reflects stable market condition within the United States, earnings estimates for Q4 indicate a sequential decline. Overall, fourth-quarter earnings for the Medical sector are expected to rise 18.4% on 12.2% sales increase. This compares with third-quarter earnings growth of 29.7% on 15.7% reported revenue growth.
Medical Device Quarterly Synopsis
Integral to the broader Medical sector, Medical Device or Zacks-defined Medical Products companies’ collective business growth is likely to have improved from the last-reported quarter’s pandemic-induced challenges. Rising Omicron cases and the ongoing supply chain constraints, however, are raising apprehensions.
The dynamic nature of the COVID-19 crisis has been transforming the Medical Products industry’s landscape over the past few months. The companies within this space saw a steep sequential decline in terms of their legacy base businesses in the Q3 reporting cycle. However, a significant rise in vaccination drives has helped people gradually get back to pre-pandemic normalcy. This, in turn, has likely resulted in somewhat of a recovery with respect to hospital visits and hospital base businesses in the ongoing reporting cycle, which in turn is expected to boost non-COVID and elective legacy businesses of the Medical sector. Although, companies are witnessing sequential recovery in their base businesses, the overall trend improvement is still below the pre-COVID level.
Despite the recent resurgence in infections (weighing on the hospital settings) that might have impacted elective procedures to an extent, the Biden administration’s push for vaccination mandates and increasing availability of at-home test kits to contain the pandemic are likely to have boosted the diagnostic space.
More specifically, in the fourth quarter, Abbott Laboratories’ (ABT - Free Report) underlying legacy diagnostics business continued to improve. This was driven by strength in ABT’s COVID-19 testing-related sales on the back of strong demand for BinaxNOW, Panbio and ID NOW rapid testing platforms.
Further, Abbott’s rapid diagnostics and point of care diagnostics sales both rose organically.
On the other hand, Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio (not involved in diagnostics), recently announced preliminary financial results for fourth-quarter 2021, where it expects a solid year-over-year improvement in quarterly revenues.
Despite not being actively involved in COVID-19-related products, PACB launched a COVID-19 surveillance solution, HiFi Viral, which is the company’s first kitted sequencing solution. The company also made noteworthy progress in developing its short-read sequencing platform by applying a new clustering method to facilitate a more robust workflow.
Let’s take a look at four Medical Device players scheduled to announce results on Feb 2.
IDEXX Laboratories, Inc. (IDXX - Free Report) : IDEXX’s Companion Animal Group (“CAG”) business is expected to have gained from consistent and healthy organic revenue growth in the fourth quarter, backed by strong performance in CAG Diagnostics recurring business in the United States and internationally. Robust growth in the U.S. clinical business is likely to have contributed to the U.S. CAG Diagnostic's recurring revenue gains. The ezyVet acquisition, completed in June 2021, expanded IDEXX’s cloud-based software capability, and is expected to have fueled growth in the CAG arm. This apart, the company’s veterinary software and diagnostic businesses are also expected to report strong growth for the fourth quarter on gains in PIMS placements and continued strong growth in related recurring service, similar to the prior quarter, with initial benefits coming from the recent ezyVet buyout. (Read more: IDEXX to Report Q4 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.67 per share. Revenues are expected to be $780.3 million.
IDEXX does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which increases the odds of an earnings beat. IDXX has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
AmerisourceBergen Corporation : AmerisourceBergen’s sustained growth in specialty product sales (including COVID-19 treatments), along with overall market growth, at its U.S. Healthcare Solutions segment, may have benefited its fiscal first-quarter 2022 performance. Apart from this, the World Courier unit is likely to have exhibited solid performance in the soon-to-be-reported quarter. During the fiscal fourth quarter of 2021, the business continued to provide high-specialty logistics worldwide despite the challenging global logistics environment while boosting innovation with clinical trials in at-home settings. This trend is likely to have sustained in the fiscal first quarter as well. (Read more: AmerisourceBergen to Post Q1 Earnings: What's in Store?)
AmerisourceBergen Corporation Price and EPS Surprise
The Zacks Consensus Estimate for AmerisourceBergen’s fiscal first-quarter earnings is pegged at $2.59 per share. Revenues are expected to be $59.42 billion.
ABC has an Earnings ESP of -0.91% and a Zacks Rank #3.
Align Technology, Inc. (ALGN - Free Report) : Align Technology has been witnessing increased utilization of Invisalign Clear Aligners and continued uptake of iTero scanners since the past few quarters. This momentum is likely to have continued throughout the fourth quarter of 2021 on the heels of reopening practices and growing doctor acceptance of the Align Digital Platform. The company has been registering substantial growth in Invisalign volumes within the teen segment, driven by increased Invisalign utilization and case submissions from Invisalign doctors. We believe this to have full-quarter contribution to fourth-quarter revenues. The growing use of the My Invisalign application and Virtual Care feature is likely to have driven Invisalign adoption further, resulting in improved sales. (Read more: Align Technology to Post Q4 Earnings: What's in Store?)
Image: Bigstock
Medical Device Stocks Earnings on Feb 2: IDXX, ABC & ALGN
The Q4 reporting cycle has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), and the quarterly performance has been stable so far. As per latest trends, the Medical sector’s earnings growth is expected to be one of the strongest among the seven top-performing sectors.
Per the latest Earnings Preview, 8.9% of the companies in the Medical sector, constituting nearly 29.2% of the sector’s market capitalization, reported earnings till Jan 26. Earnings increased 27% year over year on 12.2% higher revenues. A total of 40% of the companies’ earnings as well as revenues beat the Zacks Consensus Estimate.
Though the scorecard so far reflects stable market condition within the United States, earnings estimates for Q4 indicate a sequential decline. Overall, fourth-quarter earnings for the Medical sector are expected to rise 18.4% on 12.2% sales increase. This compares with third-quarter earnings growth of 29.7% on 15.7% reported revenue growth.
Medical Device Quarterly Synopsis
Integral to the broader Medical sector, Medical Device or Zacks-defined Medical Products companies’ collective business growth is likely to have improved from the last-reported quarter’s pandemic-induced challenges. Rising Omicron cases and the ongoing supply chain constraints, however, are raising apprehensions.
The dynamic nature of the COVID-19 crisis has been transforming the Medical Products industry’s landscape over the past few months. The companies within this space saw a steep sequential decline in terms of their legacy base businesses in the Q3 reporting cycle. However, a significant rise in vaccination drives has helped people gradually get back to pre-pandemic normalcy. This, in turn, has likely resulted in somewhat of a recovery with respect to hospital visits and hospital base businesses in the ongoing reporting cycle, which in turn is expected to boost non-COVID and elective legacy businesses of the Medical sector. Although, companies are witnessing sequential recovery in their base businesses, the overall trend improvement is still below the pre-COVID level.
Despite the recent resurgence in infections (weighing on the hospital settings) that might have impacted elective procedures to an extent, the Biden administration’s push for vaccination mandates and increasing availability of at-home test kits to contain the pandemic are likely to have boosted the diagnostic space.
More specifically, in the fourth quarter, Abbott Laboratories’ (ABT - Free Report) underlying legacy diagnostics business continued to improve. This was driven by strength in ABT’s COVID-19 testing-related sales on the back of strong demand for BinaxNOW, Panbio and ID NOW rapid testing platforms.
Further, Abbott’s rapid diagnostics and point of care diagnostics sales both rose organically.
On the other hand, Pacific Biosciences of California, Inc. (PACB - Free Report) , popularly known as PacBio (not involved in diagnostics), recently announced preliminary financial results for fourth-quarter 2021, where it expects a solid year-over-year improvement in quarterly revenues.
Despite not being actively involved in COVID-19-related products, PACB launched a COVID-19 surveillance solution, HiFi Viral, which is the company’s first kitted sequencing solution. The company also made noteworthy progress in developing its short-read sequencing platform by applying a new clustering method to facilitate a more robust workflow.
Let’s take a look at four Medical Device players scheduled to announce results on Feb 2.
IDEXX Laboratories, Inc. (IDXX - Free Report) : IDEXX’s Companion Animal Group (“CAG”) business is expected to have gained from consistent and healthy organic revenue growth in the fourth quarter, backed by strong performance in CAG Diagnostics recurring business in the United States and internationally. Robust growth in the U.S. clinical business is likely to have contributed to the U.S. CAG Diagnostic's recurring revenue gains. The ezyVet acquisition, completed in June 2021, expanded IDEXX’s cloud-based software capability, and is expected to have fueled growth in the CAG arm. This apart, the company’s veterinary software and diagnostic businesses are also expected to report strong growth for the fourth quarter on gains in PIMS placements and continued strong growth in related recurring service, similar to the prior quarter, with initial benefits coming from the recent ezyVet buyout. (Read more: IDEXX to Report Q4 Earnings: What's in the Cards?)
IDEXX Laboratories, Inc. Price and EPS Surprise
IDEXX Laboratories, Inc. price-eps-surprise | IDEXX Laboratories, Inc. Quote
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.67 per share. Revenues are expected to be $780.3 million.
IDEXX does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which increases the odds of an earnings beat. IDXX has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AmerisourceBergen Corporation : AmerisourceBergen’s sustained growth in specialty product sales (including COVID-19 treatments), along with overall market growth, at its U.S. Healthcare Solutions segment, may have benefited its fiscal first-quarter 2022 performance. Apart from this, the World Courier unit is likely to have exhibited solid performance in the soon-to-be-reported quarter. During the fiscal fourth quarter of 2021, the business continued to provide high-specialty logistics worldwide despite the challenging global logistics environment while boosting innovation with clinical trials in at-home settings. This trend is likely to have sustained in the fiscal first quarter as well. (Read more: AmerisourceBergen to Post Q1 Earnings: What's in Store?)
AmerisourceBergen Corporation Price and EPS Surprise
AmerisourceBergen Corporation price-eps-surprise | AmerisourceBergen Corporation Quote
The Zacks Consensus Estimate for AmerisourceBergen’s fiscal first-quarter earnings is pegged at $2.59 per share. Revenues are expected to be $59.42 billion.
ABC has an Earnings ESP of -0.91% and a Zacks Rank #3.
Align Technology, Inc. (ALGN - Free Report) : Align Technology has been witnessing increased utilization of Invisalign Clear Aligners and continued uptake of iTero scanners since the past few quarters. This momentum is likely to have continued throughout the fourth quarter of 2021 on the heels of reopening practices and growing doctor acceptance of the Align Digital Platform. The company has been registering substantial growth in Invisalign volumes within the teen segment, driven by increased Invisalign utilization and case submissions from Invisalign doctors. We believe this to have full-quarter contribution to fourth-quarter revenues. The growing use of the My Invisalign application and Virtual Care feature is likely to have driven Invisalign adoption further, resulting in improved sales. (Read more: Align Technology to Post Q4 Earnings: What's in Store?)
Align Technology, Inc. Price and EPS Surprise
Align Technology, Inc. price-eps-surprise | Align Technology, Inc. Quote
The Zacks Consensus Estimate for Align Technology’s fourth-quarter earnings is pegged at $2.67 per share. Revenues are expected to be $1.02 billion.
ALGN has an Earnings ESP of 0.00% and a Zacks Rank #4.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.