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MedTech Stocks' Q4 Earnings on Feb 22: FMS, GKOS & More
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The fourth-quarter reporting cycle is almost coming to its end for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Quarterly performances have been discouraging so far, with companies still recovering from the pandemic phase. Per the latest trends, the Medical sector is one of the spaces witnessing negative estimate revisions among six other sectors in the reporting cycle.
The latest Earnings Preview indicates that 75% of the companies in the Medical sector, constituting nearly 92.7% of the sector’s market capitalization, reported earnings until Feb 15. Earnings decreased 0.5% year over year despite 5.7% higher revenues. A total of 61.9% of the companies’ earnings as well as revenues beat the Zacks Consensus Estimate.
The scorecard so far reflects uncertain market conditions within the United States, with the majority of the players in the Medical sector reeling under an uncertain macroeconomic environment for a while. With economies normalizing gradually and product demand continuing to improve, the majority of the players in the Medical sector have been posting encouraging quarterly results. However, the inflationary pressure, labor shortage, supply-chain disruption and interest-rate hikes are expected to have hurt industry players' performance in the quarter ending December 2022. Overall, fourth-quarter earnings of the Medical sector are expected to decline 6.5% despite a 4.8% sales increase. This compares with third-quarter earnings decline of 3.3% despite 5.1% reported revenue growth.
MedTech Quarterly Synopsis
The MedTech companies’ collective business growth is likely to have improved from the comparable prior-year period’s performance. This year, COVID-led fatality across the United States and other developed countries continued to decline significantly thus far. Additionally, notable MedTech players have been making consistent efforts to mitigate staffing shortages that have disrupted business growth. However, continued supply chain-induced constraints, inflationary pressure and an overall unstable macroeconomic business environment are likely to have dampened the overall recovery of the MedTech players following the prior-year’s pandemic-induced challenges.
Although the countries have been lifting COVID-19 restrictions over the past few months (barring a few regions), the continuous reopening of economies might still not have been sufficient to boost the growth process in the December quarter amid a tough business climate. These factors are likely to have significantly weighed on the performances of several businesses of the MedTech sector during the fourth quarter.
Overall, the strength in the product portfolios and solid customer adoption of the products through the October-December months are expected to have been impressive. MedTech companies like Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) , Glaukos Corporation (GKOS - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and DaVita Inc. (DVA - Free Report) are likely to have been positively impacted by the tailwinds discussed above, despite encountering turbulence on the macroeconomic front.
Let’s observe the status of four MedTech players, scheduled to announce results on Feb 22.
Fresenius Medical: At the time of its third-quarter 2022 earnings release in October, Fresenius Medical confirmed that its business development continues to be strongly impacted by highly uncertain macroeconomic environment, driving wage and general cost inflation in all reporting segments. As the company continued to face an unprecedented labor market situation in the United States, resulting in staff shortages, high turnover rates and meaningfully higher costs, its growth in U.S. Dialysis Services was adversely impacted. Given that the medical sector is still reeling under inflationary pressures and labor issues, Fresenius Medical’s fourth-quarter performance is likely to have been impacted.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at 22 cents per share. Revenues are expected to be $4.85 billion.
Fresenius Medical Care AG & Co. KGaA Price and EPS Surprise
Fresenius Medical 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. FMS 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.
Glaukos: Glaukos’ fourth-quarter 2022 top line is likely to have been boosted by the continued successful expansion of its comprehensive product offering for its customers, with the introduction of several novel ophthalmic technologies, including iAccess (a novel instrument with features that allow customers to perform goniotomy procedures) and iPRIME (an innovative new viscoelastic delivery device). On the third-quarter 2022 earnings call in November, management confirmed that in the to-be-reported quarter, Glaukos commenced the U.S. initial commercial launch activities for iStent infinite, its novel 3-stent injectable system. This looks promising for the stock. The company’s Micro-Invasive Glaucoma Surgery has also been witnessing strong customer adoption across the globe, which further raises our optimism.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at a loss of 56 cents per share. The consensus mark for revenues is $67.7 million.
GKOS has an Earnings ESP of 0.00% and a Zacks Rank #3.
Merit Medical: Merit Medical’s fourth-quarter 2022 results are likely to be boosted by continued demand for its products. The company has launched a few products over the past few months, like the Prelude Roadster Guide Sheath (September 2022) and the Elation pulmonary balloon dilator (July 2022). These products are likely to have witnessed robust customer adoption since their launches, thereby significantly driving the to-be-reported quarter’s revenues.
The Zacks Consensus Estimate for Merit Medical’s earnings for the fourth quarter is pegged at 67 cents per share. Revenues are estimated to be $289.8 million.
Merit Medical Systems, Inc. Price and EPS Surprise
MMSI has an Earnings ESP of 0.00% and a Zacks Rank #2.
DaVita: On third-quarter 2022 call in October, DaVita confirmed that it continued to witness treatment volume and labor-related headwinds in the reported quarter. Management confirmed that the headwinds in volumes had persisted longer than was assumed and that contract labor costs and productivity did not begin to improve in the quarter as had been expected by DaVita. Management also confirmed that it expects the pressure to continue longer than anticipated. Moreover, the continued uncertainty from COVID-19 and the labor market led DaVita to lower its guidance for the year. This does not look encouraging for the company as this is likely to have significantly impacted fourth-quarter revenues. However, DaVita is likely to have continued to benefit from its acquisition of MedSleuth, which was completed in January 2022. (Read more: DaVita to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at 88 cents per share. The consensus estimate for revenues is $2.94 billion.
Image: Bigstock
MedTech Stocks' Q4 Earnings on Feb 22: FMS, GKOS & More
The fourth-quarter reporting cycle is almost coming to its end for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Quarterly performances have been discouraging so far, with companies still recovering from the pandemic phase. Per the latest trends, the Medical sector is one of the spaces witnessing negative estimate revisions among six other sectors in the reporting cycle.
The latest Earnings Preview indicates that 75% of the companies in the Medical sector, constituting nearly 92.7% of the sector’s market capitalization, reported earnings until Feb 15. Earnings decreased 0.5% year over year despite 5.7% higher revenues. A total of 61.9% of the companies’ earnings as well as revenues beat the Zacks Consensus Estimate.
The scorecard so far reflects uncertain market conditions within the United States, with the majority of the players in the Medical sector reeling under an uncertain macroeconomic environment for a while. With economies normalizing gradually and product demand continuing to improve, the majority of the players in the Medical sector have been posting encouraging quarterly results. However, the inflationary pressure, labor shortage, supply-chain disruption and interest-rate hikes are expected to have hurt industry players' performance in the quarter ending December 2022. Overall, fourth-quarter earnings of the Medical sector are expected to decline 6.5% despite a 4.8% sales increase. This compares with third-quarter earnings decline of 3.3% despite 5.1% reported revenue growth.
MedTech Quarterly Synopsis
The MedTech companies’ collective business growth is likely to have improved from the comparable prior-year period’s performance. This year, COVID-led fatality across the United States and other developed countries continued to decline significantly thus far. Additionally, notable MedTech players have been making consistent efforts to mitigate staffing shortages that have disrupted business growth. However, continued supply chain-induced constraints, inflationary pressure and an overall unstable macroeconomic business environment are likely to have dampened the overall recovery of the MedTech players following the prior-year’s pandemic-induced challenges.
Although the countries have been lifting COVID-19 restrictions over the past few months (barring a few regions), the continuous reopening of economies might still not have been sufficient to boost the growth process in the December quarter amid a tough business climate. These factors are likely to have significantly weighed on the performances of several businesses of the MedTech sector during the fourth quarter.
Overall, the strength in the product portfolios and solid customer adoption of the products through the October-December months are expected to have been impressive. MedTech companies like Fresenius Medical Care AG & Co. KGaA (FMS - Free Report) , Glaukos Corporation (GKOS - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and DaVita Inc. (DVA - Free Report) are likely to have been positively impacted by the tailwinds discussed above, despite encountering turbulence on the macroeconomic front.
Let’s observe the status of four MedTech players, scheduled to announce results on Feb 22.
Fresenius Medical: At the time of its third-quarter 2022 earnings release in October, Fresenius Medical confirmed that its business development continues to be strongly impacted by highly uncertain macroeconomic environment, driving wage and general cost inflation in all reporting segments. As the company continued to face an unprecedented labor market situation in the United States, resulting in staff shortages, high turnover rates and meaningfully higher costs, its growth in U.S. Dialysis Services was adversely impacted. Given that the medical sector is still reeling under inflationary pressures and labor issues, Fresenius Medical’s fourth-quarter performance is likely to have been impacted.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at 22 cents per share. Revenues are expected to be $4.85 billion.
Fresenius Medical Care AG & Co. KGaA Price and EPS Surprise
Fresenius Medical Care AG & Co. KGaA price-eps-surprise | Fresenius Medical Care AG & Co. KGaA Quote
Fresenius Medical 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. FMS 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.
Glaukos: Glaukos’ fourth-quarter 2022 top line is likely to have been boosted by the continued successful expansion of its comprehensive product offering for its customers, with the introduction of several novel ophthalmic technologies, including iAccess (a novel instrument with features that allow customers to perform goniotomy procedures) and iPRIME (an innovative new viscoelastic delivery device). On the third-quarter 2022 earnings call in November, management confirmed that in the to-be-reported quarter, Glaukos commenced the U.S. initial commercial launch activities for iStent infinite, its novel 3-stent injectable system. This looks promising for the stock. The company’s Micro-Invasive Glaucoma Surgery has also been witnessing strong customer adoption across the globe, which further raises our optimism.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at a loss of 56 cents per share. The consensus mark for revenues is $67.7 million.
Glaukos Corporation Price and EPS Surprise
Glaukos Corporation price-eps-surprise | Glaukos Corporation Quote
GKOS has an Earnings ESP of 0.00% and a Zacks Rank #3.
Merit Medical: Merit Medical’s fourth-quarter 2022 results are likely to be boosted by continued demand for its products. The company has launched a few products over the past few months, like the Prelude Roadster Guide Sheath (September 2022) and the Elation pulmonary balloon dilator (July 2022). These products are likely to have witnessed robust customer adoption since their launches, thereby significantly driving the to-be-reported quarter’s revenues.
The Zacks Consensus Estimate for Merit Medical’s earnings for the fourth quarter is pegged at 67 cents per share. Revenues are estimated to be $289.8 million.
Merit Medical Systems, Inc. Price and EPS Surprise
Merit Medical Systems, Inc. price-eps-surprise | Merit Medical Systems, Inc. Quote
MMSI has an Earnings ESP of 0.00% and a Zacks Rank #2.
DaVita: On third-quarter 2022 call in October, DaVita confirmed that it continued to witness treatment volume and labor-related headwinds in the reported quarter. Management confirmed that the headwinds in volumes had persisted longer than was assumed and that contract labor costs and productivity did not begin to improve in the quarter as had been expected by DaVita. Management also confirmed that it expects the pressure to continue longer than anticipated. Moreover, the continued uncertainty from COVID-19 and the labor market led DaVita to lower its guidance for the year. This does not look encouraging for the company as this is likely to have significantly impacted fourth-quarter revenues. However, DaVita is likely to have continued to benefit from its acquisition of MedSleuth, which was completed in January 2022. (Read more: DaVita to Report Q4 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for fourth-quarter 2022 earnings is pegged at 88 cents per share. The consensus estimate for revenues is $2.94 billion.
DaVita Inc. Price and EPS Surprise
DaVita Inc. price-eps-surprise | DaVita Inc. Quote
DVA has an Earnings ESP of -1.71% and a Zacks Rank #4.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.