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Medical Device Stocks' Earnings on Feb 1: RVTY, CAH & More
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The fourth-quarter reporting cycle has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Quarterly performances have been encouraging so far despite companies still recovering from inflationary pressures, unfavorable foreign exchange headwinds and labor shortages.
The latest Earnings Preview indicates that 8.3% of the companies in the Medical sector, constituting nearly 25.9% of the sector’s market capitalization, reported earnings until Jan 24. Of these, 60% beat earnings and revenue estimates. Earnings increased 3.3% year over year on 7.9% higher revenues.
Overall, fourth-quarter earnings of the Medical sector are expected to decline 22.2% despite a 4.2% sales increase. This compares with third-quarter earnings decline of 16.7% despite 6.6% reported revenue growth. Per the latest trends, the Medical sector is one of the spaces expected to experience the biggest earnings declines in the reporting cycle. It is also one of the seven sectors that are expected to earn less in the fourth quarter of 2023 compared with the year-ago period.
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 been significantly dampened by the ongoing macroeconomic threat in the United States and outside. The industry is facing a challenging period due to worsening global trade conditions. This situation is exacerbated by worldwide inflation, which is increasing the costs of raw materials and labor, along with higher medical and freight expenses. Most companies in this sector experienced a surge in the costs of raw materials and other expenses through the fourth-quarter months. Additionally, issues with labor availability, currency headwinds and global supply-chain difficulties are anticipated to have slowed down growth.
On a positive note, during the post-pandemic phase, the key focus of medical device research and development shifted from COVID-related testing and distant care options to point-of-care testing, heavy as well as minimally invasive implants and elective procedures, among others. Accordingly, legacy-based business recovery and testing demand of the companies through the months of the fourth quarter are expected to have been impressive. Meanwhile, artificial intelligence (AI) and robotics for the medical Internet of Things (IoT), which came to the forefront during the pandemic phase, remained popular.
Overall, the October-December months were marked by strength in product portfolios and solid customer adoption of products. Medical Device companies like Cardinal Health, Inc. (CAH - Free Report) , Revvity, Inc. (RVTY - Free Report) , CONMED Corporation (CNMD - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Becton Dickinson and Company (BDX - Free Report) , popularly known as BD, 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 five MedTech players, who are scheduled to announce results on Feb 1, 2024.
Cardinal Health: Cardinal Health’s Pharmaceutical segment is one of the largest pharmaceutical distributors in the United States. In the first quarter of fiscal 2024, revenues from this segment were up 11% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth in the Pharmaceutical Distribution and Specialty Solutions segment. This momentum is likely to have continued in the fiscal second quarter. Moreover, the rising demand for GLP-1 medications is likely to have acted as a tailwind. The company’s generics program sales were also strong during the last reported quarter, and its upcoming results are expected to gain from this trend. (Read more: What's in Store for Cardinal Health in Q2 Earnings?)
The Zacks Consensus Estimate for second-quarter fiscal 2024 earnings per share (EPS) is pegged at $1.56. Revenues are expected to be $56.82 billion.
Cardinal Health 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. CAH has an Earnings ESP of -0.79% and a Zacks Rank #1. 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.
Revvity: Revvity’s Diagnostics business is expected to have continued its declining trend in the fourth quarter of 2023. Sales in this segment declined 9% in the last reported quarter, primarily due to a drop in demand for COVID-related products. However, this is likely to have been partially offset by a strong demand for non-COVID products in the fourth quarter. The removal of COVID-19 restrictions in China might have boosted the continued demand for RVTY’s immunodiagnostics business. This, in turn, is likely to have partially offset loss of sales from COVID-related products. (Read more: Revvity to Report Q4 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for fourth-quarter 2023 EPS is pegged at $1.15. Revenues are expected to be $667 million.
RVTY has an Earnings ESP of +2.49% and a Zacks Rank #3.
CONMED: CONMED’s fourth-quarter 2023 revenues are likely to have been aided by strength in its end markets. The company had benefited from its newly acquired businesses in third-quarter 2023, which are likely to have contributed to its fourth-quarter revenues as well. CONMED is also likely to have maintained its strong performance in the United States as well as international markets. The company’s two products — In2Bones and Biorez — which were the key drivers during the third quarter, are also likely to have driven up the fourth-quarter results.
The Zacks Consensus Estimate for fourth-quarter 2023 EPS is pegged at $1.11. Revenues are expected to be $332.9 million.
CNMD has an Earnings ESP of 0.00% and a Zacks Rank #3.
Surmodics: Surmodics’ first-quarter fiscal 2024 performance is likely to have been driven by continued strong performance by its Medical Device and In Vitro Diagnostics (IVD) businesses. In the fourth quarter of fiscal 2023, the Medical Device revenues were partly driven by significant contributions to product sales from the Pounce thrombectomy device platform, while IVD sales were partly driven by strong customer demand for microarray slide/surface products. This momentum is likely to have continued in the fiscal first quarter, thereby driving up the company’s revenues.
The Zacks Consensus Estimate for first-quarter fiscal 2024 loss per share is pegged at 35 cents. Revenues are expected to be $29.6 million.
SRDX has an Earnings ESP of 0.00% and a Zacks Rank #3.
BD: BD’s fourth-quarter fiscal 2023 results continued to witness lower COVID-only testing revenues. However, excluding COVID-only testing, the Life Sciences segment’s base revenues witnessed growth driven by strength in the Biosciences (BDB) business unit. BDB’s performance reflected growth in Research Instruments driven by strong demand for the company’s BD FACSDiscover S8 Cell Sorter and strength in Clinical Reagents leveraging its growing installed base of FACSLyric analyzers and FACSDuet automation. These trends are likely to have continued in first-quarter fiscal 2024. This, in turn, is anticipated to have contributed to the strength in base business despite the expected ceaseless fall in COVID-only testing revenues.
In November 2023, BD launched the SiteRite 9 Ultrasound System. The same month, BD launched a new needle-free blood draw technology compatible with integrated catheters, the PIVO Pro Needle-free Blood Collection Device. These products are likely to have witnessed robust adoption in recent months, thereby driving up the Medical segment’s revenues in the to-be-reported quarter. (Read more: BD Gears Up for Q1 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for first-quarter fiscal 2024 EPS is pegged at $2.39. Revenues are expected to be $4.74 billion.
Becton, Dickinson and Company Price and EPS Surprise
Image: Bigstock
Medical Device Stocks' Earnings on Feb 1: RVTY, CAH & More
The fourth-quarter reporting cycle has just begun for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification). Quarterly performances have been encouraging so far despite companies still recovering from inflationary pressures, unfavorable foreign exchange headwinds and labor shortages.
The latest Earnings Preview indicates that 8.3% of the companies in the Medical sector, constituting nearly 25.9% of the sector’s market capitalization, reported earnings until Jan 24. Of these, 60% beat earnings and revenue estimates. Earnings increased 3.3% year over year on 7.9% higher revenues.
Overall, fourth-quarter earnings of the Medical sector are expected to decline 22.2% despite a 4.2% sales increase. This compares with third-quarter earnings decline of 16.7% despite 6.6% reported revenue growth. Per the latest trends, the Medical sector is one of the spaces expected to experience the biggest earnings declines in the reporting cycle. It is also one of the seven sectors that are expected to earn less in the fourth quarter of 2023 compared with the year-ago period.
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 been significantly dampened by the ongoing macroeconomic threat in the United States and outside. The industry is facing a challenging period due to worsening global trade conditions. This situation is exacerbated by worldwide inflation, which is increasing the costs of raw materials and labor, along with higher medical and freight expenses. Most companies in this sector experienced a surge in the costs of raw materials and other expenses through the fourth-quarter months. Additionally, issues with labor availability, currency headwinds and global supply-chain difficulties are anticipated to have slowed down growth.
On a positive note, during the post-pandemic phase, the key focus of medical device research and development shifted from COVID-related testing and distant care options to point-of-care testing, heavy as well as minimally invasive implants and elective procedures, among others. Accordingly, legacy-based business recovery and testing demand of the companies through the months of the fourth quarter are expected to have been impressive. Meanwhile, artificial intelligence (AI) and robotics for the medical Internet of Things (IoT), which came to the forefront during the pandemic phase, remained popular.
Overall, the October-December months were marked by strength in product portfolios and solid customer adoption of products. Medical Device companies like Cardinal Health, Inc. (CAH - Free Report) , Revvity, Inc. (RVTY - Free Report) , CONMED Corporation (CNMD - Free Report) , Surmodics, Inc. (SRDX - Free Report) and Becton Dickinson and Company (BDX - Free Report) , popularly known as BD, 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 five MedTech players, who are scheduled to announce results on Feb 1, 2024.
Cardinal Health: Cardinal Health’s Pharmaceutical segment is one of the largest pharmaceutical distributors in the United States. In the first quarter of fiscal 2024, revenues from this segment were up 11% on a year-over-year basis. The performance reflects branded pharmaceutical sales growth in the Pharmaceutical Distribution and Specialty Solutions segment. This momentum is likely to have continued in the fiscal second quarter. Moreover, the rising demand for GLP-1 medications is likely to have acted as a tailwind. The company’s generics program sales were also strong during the last reported quarter, and its upcoming results are expected to gain from this trend. (Read more: What's in Store for Cardinal Health in Q2 Earnings?)
The Zacks Consensus Estimate for second-quarter fiscal 2024 earnings per share (EPS) is pegged at $1.56. Revenues are expected to be $56.82 billion.
Cardinal Health, Inc. Price and EPS Surprise
Cardinal Health, Inc. price-eps-surprise | Cardinal Health, Inc. Quote
Cardinal Health 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. CAH has an Earnings ESP of -0.79% and a Zacks Rank #1. 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.
Revvity: Revvity’s Diagnostics business is expected to have continued its declining trend in the fourth quarter of 2023. Sales in this segment declined 9% in the last reported quarter, primarily due to a drop in demand for COVID-related products. However, this is likely to have been partially offset by a strong demand for non-COVID products in the fourth quarter. The removal of COVID-19 restrictions in China might have boosted the continued demand for RVTY’s immunodiagnostics business. This, in turn, is likely to have partially offset loss of sales from COVID-related products. (Read more: Revvity to Report Q4 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for fourth-quarter 2023 EPS is pegged at $1.15. Revenues are expected to be $667 million.
Revvity Inc. Price and EPS Surprise
Revvity Inc. price-eps-surprise | Revvity Inc. Quote
RVTY has an Earnings ESP of +2.49% and a Zacks Rank #3.
CONMED: CONMED’s fourth-quarter 2023 revenues are likely to have been aided by strength in its end markets. The company had benefited from its newly acquired businesses in third-quarter 2023, which are likely to have contributed to its fourth-quarter revenues as well. CONMED is also likely to have maintained its strong performance in the United States as well as international markets. The company’s two products — In2Bones and Biorez — which were the key drivers during the third quarter, are also likely to have driven up the fourth-quarter results.
The Zacks Consensus Estimate for fourth-quarter 2023 EPS is pegged at $1.11. Revenues are expected to be $332.9 million.
CONMED Corporation Price and EPS Surprise
CONMED Corporation price-eps-surprise | CONMED Corporation Quote
CNMD has an Earnings ESP of 0.00% and a Zacks Rank #3.
Surmodics: Surmodics’ first-quarter fiscal 2024 performance is likely to have been driven by continued strong performance by its Medical Device and In Vitro Diagnostics (IVD) businesses. In the fourth quarter of fiscal 2023, the Medical Device revenues were partly driven by significant contributions to product sales from the Pounce thrombectomy device platform, while IVD sales were partly driven by strong customer demand for microarray slide/surface products. This momentum is likely to have continued in the fiscal first quarter, thereby driving up the company’s revenues.
The Zacks Consensus Estimate for first-quarter fiscal 2024 loss per share is pegged at 35 cents. Revenues are expected to be $29.6 million.
Surmodics, Inc. Price and EPS Surprise
Surmodics, Inc. price-eps-surprise | Surmodics, Inc. Quote
SRDX has an Earnings ESP of 0.00% and a Zacks Rank #3.
BD: BD’s fourth-quarter fiscal 2023 results continued to witness lower COVID-only testing revenues. However, excluding COVID-only testing, the Life Sciences segment’s base revenues witnessed growth driven by strength in the Biosciences (BDB) business unit. BDB’s performance reflected growth in Research Instruments driven by strong demand for the company’s BD FACSDiscover S8 Cell Sorter and strength in Clinical Reagents leveraging its growing installed base of FACSLyric analyzers and FACSDuet automation. These trends are likely to have continued in first-quarter fiscal 2024. This, in turn, is anticipated to have contributed to the strength in base business despite the expected ceaseless fall in COVID-only testing revenues.
In November 2023, BD launched the SiteRite 9 Ultrasound System. The same month, BD launched a new needle-free blood draw technology compatible with integrated catheters, the PIVO Pro Needle-free Blood Collection Device. These products are likely to have witnessed robust adoption in recent months, thereby driving up the Medical segment’s revenues in the to-be-reported quarter. (Read more: BD Gears Up for Q1 Earnings: What's in the Offing?)
The Zacks Consensus Estimate for first-quarter fiscal 2024 EPS is pegged at $2.39. Revenues are expected to be $4.74 billion.
Becton, Dickinson and Company Price and EPS Surprise
Becton, Dickinson and Company price-eps-surprise | Becton, Dickinson and Company Quote
BDX has an Earnings ESP of -0.09% and a Zacks Rank #4 (Sell).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.