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Medical Device Stocks Earnings on Aug 4: BDX, ABMD, AMN & DOCS

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The second-quarter reporting cycle has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification), with the quarterly performance being stable so far. Per the latest trends, the Medical sector is expected to be one space that is enjoying positive estimate revisions among seven other sectors.

The latest Earnings Preview indicates that 25% of the companies in the Medical sector, constituting nearly 41.2% of the sector’s market capitalization, reported earnings until Jul 29. Earnings increased 5.1% year over year on 10.7% higher revenues. A total of 78.6% of the companies’ earnings as well as revenues beat the Zacks Consensus Estimate.

Though the scorecard has so far reflected stable market conditions within the United States, the majority of the players in the Medical sector have been reeling under an uncertain macroeconomic environment for a while. This highlights the Medical sector’s continued resilience in the face of challenging market conditions. Overall, second-quarter earnings for the Medical sector are expected to rise 1.1% on 7.9% sales increase. This compares with first-quarter earnings growth of 16.7% on 15.6% reported revenue growth.

Medical Device Quarterly Synopsis

Integral to the broader Medical sector, the Medical Device or Zacks-defined Medical Products companies’ collective business growth is likely to have improved from the comparable prior-year period’s pandemic-induced challenges. This year, the COVID-led fatality across the United States and other developed countries has declined significantly thus far. Additionally, notable Medical Device players are making consistent efforts to mitigate staffing shortages that have disrupted business growth since the beginning of the pandemic. These factors are likely to have been advantageous for the base businesses of the Medical Device stocks.

With countries lifting COVID-19 restrictions, the continuous reopening of economies might have favored the growth process in the June quarter despite a tough business climate.

However, the ongoing global supply-chain constraints (including the global crisis of semiconductors chips), a greater-than-anticipated surge in inflationary pressures across the world, mounting raw material costs and labor-supply problems are adding to the woes. These factors are likely to have significantly weighed on the performances in several businesses of the Medical Device industry during the second quarter.

Overall, the strength in the product portfolios and a solid customer adoption of the products through the April-June months are expected to be impressive. Medical Device companies like Becton Dickinson and Company (BDX - Free Report) , popularly known as BD, Abiomed, Inc. (ABMD - Free Report) , AMN Healthcare Services, Inc. (AMN - Free Report) and Doximity, Inc. (DOCS - Free Report) are likely to have been positively impacted by the tailwinds discussed above, despite encountering turbulences on the macroeconomic front.

Let’s observe the status of four Medical Device players, scheduled to announce results on Aug 4.

BD: BD’s Life Sciences segment’s Integrated Diagnostic Solutions (IDS) has been recording a solid uptick in the base business over the past few months. This uptick was driven by demand for combination flu/COVID-19 diagnostic tests and continued demand for specimen management products. This trend is expected to have continued in third-quarter fiscal 2022 as well, favored by falling COVID-only testing revenues, thereby driving BD’s base business growth of IDS. Further, continued robust demand for research solutions owing to recovery in lab activity and sustained COVID-19 research is likely to be another revenue driver for BD’s Biosciences business of the broader Life Sciences arm. Several product launches and strategic partnerships also buoy our optimism regarding the stock. (Read more: BD Gears Up for Q3 Earnings: What's in the Offing?)

The Zacks Consensus Estimate for third-quarter fiscal 2022 earnings is pegged at $2.49 per share. Revenues are expected to be $4.46 billion.

BD 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. BDX has an Earnings ESP of -1.52% and a Zacks Rank #2. 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.

Abiomed: Sustained adoption of Abiomed’s Impella 5.5 with SmartAssist and Impella Connect across the globe over the past few months is likely to have significantly driven the overall top line in the first quarter of fiscal 2023. Abiomed’s Impella ECP is also likely to have witnessed a strong customer adoption in the to-be-reported quarter owing to its design, which is expected to help physicians provide critical hemodynamic support to coronary artery disease patients. This, along with Impella RP with SmartAssist, is likely to have driven revenues in the fiscal first quarter. (Read more: Abiomed to Report Q1 Earnings: What's in the Cards?)

Abiomed, Inc. Price and EPS Surprise

Abiomed, Inc. Price and EPS Surprise

Abiomed, Inc. price-eps-surprise | Abiomed, Inc. Quote

The Zacks Consensus Estimate for Abiomed’s earnings for the fiscal first quarter is pegged at $1.09 per share. Revenues are expected to be $280.7 million.

ABMD has an Earnings ESP of +2.30% and a Zacks Rank #3.

AMN Healthcare: AMN Healthcare has been steadily delivering large-scale managed services programs (MSP) over the past few months. AMN’s pipeline for healthcare organizations seeking MSP/VMS (vendor management systems) and other workforce solutions looks encouraging. Growing demand for its comprehensive solutions to address the recruitment and staffing issues is likely to have significantly driven the overall top line in the to-be-reported quarter. Management expects robust segmental performances for the second quarter of 2022. (Read more: AMN Healthcare to Post Q2 Earnings: What's in the Cards?)

The Zacks Consensus Estimate for AMN Healthcare’s second-quarter earnings is pegged at $2.96 per share. Revenues are expected to be $1.36 billion.

AMN has an Earnings ESP of 0.00% and a Zacks Rank #3.

Doximity: Doximity is likely to have been benefitted from the ongoing shift to digital among its clients, which might have driven its revenues in first-quarter fiscal 2023. Strength in its fax, e-signature and telehealth products, which has been witnessing a robust adoption by clients over the past few months, is likely to be other top contributors to its top line for the fiscal first quarter. (Read more: Doximity to Report Q1 Earnings: What's in the Offing?)

Doximity, Inc. Price and EPS Surprise

Doximity, Inc. Price and EPS Surprise

Doximity, Inc. price-eps-surprise | Doximity, Inc. Quote

The Zacks Consensus Estimate for Doximity’s earnings for the fiscal first quarter is pegged at 11 cents per share. Revenues are expected to be $89.3 million.

DOCS has an Earnings ESP of 0.00% and a Zacks Rank #3.

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