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Medical Products Stocks' Earnings Due on Feb 7: STE, PAHC & NVST
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Several large-cap MedTech players have already announced fourth-quarter results. Among them, Boston Scientific, Hologic, IDEXX Laboratories and Thermo Fisher topped earnings and sales estimates. Abbott and Quest Diagnostics delivered mixed results as they grappled with the ongoing macroeconomic issues. A similar trend is expected to be reflected in the results of other industry players.
Some major industry players like STERIS (STE - Free Report) , Phibro Animal Health (PAHC - Free Report) and Envista (NVST - Free Report) are set to report their results tomorrow.
Q4 Preview and Scorecard
Per the latest Earnings Preview, quarterly results of the Medical sector so far have declined year over year affected by the ongoing macroeconomic headwinds in the form of worldwide geopolitical issues, inflationary pressure and unfavorable foreign exchange headwinds. Going by the broader Medical sector’s scorecard, 21.7% of the companies in the Medical sector, constituting 41.1% of the sector’s market capitalization, reported earnings till Jan 31. Of these, earnings declined 17.6% year over year on 5.8% higher revenues. However, 76.9% of these companies beat earnings and 92.3% beat revenue estimates, which were already down because of the ongoing macroeconomic issues.
Overall, fourth-quarter earnings of the Medical sector are expected to plunge 19.5% on 5% revenue growth. This compares with the third-quarter earnings decline of 16.7% on revenue growth of 6.6%.
Factors Likely to Influence MedTech Stocks’ Results
Replicating the broader market trend, MedTech or the Zacks-defined Medical Products companies’ collective business growth in the fourth quarter is likely to have been significantly dampened by the ongoing macroeconomic threat in the United States and outside. The projection reflects a declining overall operating margin scenario.
Deteriorating international trade, with global inflationary pressure leading to an extremely tough situation related to raw material and labor costs, and higher medical expenses as well as freight charges have put the industry in a tight spot again. The majority of the players within this space witnessed a rise in raw material costs and other expense pressure through the fourth-quarter months. Added to this, labor-supply constraints, in the form of labordemic and global supply chain hazards, are expected to have moderated the growth process.
Also, diagnostic testing companies have been witnessing a severe year-over-year decline in testing demand, compared to strong demand in the year-ago period for COVID testing products.
MedTech Stocks to Watch
STERIS: As witnessed in recent months, the Healthcare arm of STERIS is likely to have continued its strong momentum in the fiscal third quarter. Growth across capital equipment, consumables and services is expected to have been robust, primarily driven by the procedure volume rebound in the United States, as well as price and market share gains. This may have helped the company offset the macro challenges impacting demand in the other segments.
We assume the Healthcare backlog to have further reduced, as the company may have been able to ship at a faster pace than the new orders that are coming in. STERIS’ focus on getting back to normal lead times may have helped it meet customer demand.
The Zacks Consensus Estimate for STERIS’ third-quarter fiscal 2024 revenues is pegged at $1.34 billion, suggesting an increase of 10.1% from the year-ago reported figure. The Zacks Consensus Estimate for fiscal third-quarter EPS of $2.16 indicates a 6.9% rise from the year-ago reported figure.
Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is not the case, as you can see below.
STE has an Earnings ESP of -0.15% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Phibro: The company is expected to have gained in the second quarter of fiscal 2024 on focused expansion of footprint in the poultry, swine and cattle industries, in both domestic and international markets. In terms of the vaccine product line, the business growth is expected to have been driven by new registrations, which, according to Phibro, will open new markets for the products. However, regulatory issues surrounding Mecadox might have dampened growth.
The Zacks Consensus Estimate for Phibro’s second-quarter fiscal 2024 revenues is pegged at $242.9 million, suggesting a decline of 0.7% from the year-ago reported figure. The Zacks Consensus Estimate for second-quarter earnings of 27 cents indicates a 20.6% decline from the year-ago quarter’s earnings of 34 cents.
PAHC has an Earnings ESP of 0.00% and carries a Zacks Rank #3.
Phibro Animal Health Corporation Price and EPS Surprise
Envista: The company might have continued to gain in the fourth quarter of 2023 within its Speciality Products & Technologies business, banking on strategic development, manufacturing and marketing of dental implant systems, including regenerative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. However, macroeconomic issues might have created significant pressure on the company’s profitability.
The Zacks Consensus Estimate for Envista’s fourth-quarter 2023 revenues is pegged at $632.7 million, suggesting a decline of 4.3% from the year-ago reported figure. The Zacks Consensus Estimate for fourth-quarter 2023 EPS is 34 cents, implying a decline of 34.6% on a year-over-year basis.
Envista has an Earnings ESP of -6.52% and carries a Zacks Rank #5 (Strong Sell).
Image: Bigstock
Medical Products Stocks' Earnings Due on Feb 7: STE, PAHC & NVST
Several large-cap MedTech players have already announced fourth-quarter results. Among them, Boston Scientific, Hologic, IDEXX Laboratories and Thermo Fisher topped earnings and sales estimates. Abbott and Quest Diagnostics delivered mixed results as they grappled with the ongoing macroeconomic issues. A similar trend is expected to be reflected in the results of other industry players.
Some major industry players like STERIS (STE - Free Report) , Phibro Animal Health (PAHC - Free Report) and Envista (NVST - Free Report) are set to report their results tomorrow.
Q4 Preview and Scorecard
Per the latest Earnings Preview, quarterly results of the Medical sector so far have declined year over year affected by the ongoing macroeconomic headwinds in the form of worldwide geopolitical issues, inflationary pressure and unfavorable foreign exchange headwinds. Going by the broader Medical sector’s scorecard, 21.7% of the companies in the Medical sector, constituting 41.1% of the sector’s market capitalization, reported earnings till Jan 31. Of these, earnings declined 17.6% year over year on 5.8% higher revenues. However, 76.9% of these companies beat earnings and 92.3% beat revenue estimates, which were already down because of the ongoing macroeconomic issues.
Overall, fourth-quarter earnings of the Medical sector are expected to plunge 19.5% on 5% revenue growth. This compares with the third-quarter earnings decline of 16.7% on revenue growth of 6.6%.
Factors Likely to Influence MedTech Stocks’ Results
Replicating the broader market trend, MedTech or the Zacks-defined Medical Products companies’ collective business growth in the fourth quarter is likely to have been significantly dampened by the ongoing macroeconomic threat in the United States and outside. The projection reflects a declining overall operating margin scenario.
Deteriorating international trade, with global inflationary pressure leading to an extremely tough situation related to raw material and labor costs, and higher medical expenses as well as freight charges have put the industry in a tight spot again. The majority of the players within this space witnessed a rise in raw material costs and other expense pressure through the fourth-quarter months. Added to this, labor-supply constraints, in the form of labordemic and global supply chain hazards, are expected to have moderated the growth process.
Also, diagnostic testing companies have been witnessing a severe year-over-year decline in testing demand, compared to strong demand in the year-ago period for COVID testing products.
MedTech Stocks to Watch
STERIS: As witnessed in recent months, the Healthcare arm of STERIS is likely to have continued its strong momentum in the fiscal third quarter. Growth across capital equipment, consumables and services is expected to have been robust, primarily driven by the procedure volume rebound in the United States, as well as price and market share gains. This may have helped the company offset the macro challenges impacting demand in the other segments.
We assume the Healthcare backlog to have further reduced, as the company may have been able to ship at a faster pace than the new orders that are coming in. STERIS’ focus on getting back to normal lead times may have helped it meet customer demand.
(Read more: STERIS Set to Post Q3 Earnings: What's in the Cards)
The Zacks Consensus Estimate for STERIS’ third-quarter fiscal 2024 revenues is pegged at $1.34 billion, suggesting an increase of 10.1% from the year-ago reported figure. The Zacks Consensus Estimate for fiscal third-quarter EPS of $2.16 indicates a 6.9% rise from the year-ago reported figure.
Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is not the case, as you can see below.
STE has an Earnings ESP of -0.15% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
STERIS plc Price and EPS Surprise
STERIS plc price-eps-surprise | STERIS plc Quote
Phibro: The company is expected to have gained in the second quarter of fiscal 2024 on focused expansion of footprint in the poultry, swine and cattle industries, in both domestic and international markets. In terms of the vaccine product line, the business growth is expected to have been driven by new registrations, which, according to Phibro, will open new markets for the products. However, regulatory issues surrounding Mecadox might have dampened growth.
The Zacks Consensus Estimate for Phibro’s second-quarter fiscal 2024 revenues is pegged at $242.9 million, suggesting a decline of 0.7% from the year-ago reported figure. The Zacks Consensus Estimate for second-quarter earnings of 27 cents indicates a 20.6% decline from the year-ago quarter’s earnings of 34 cents.
PAHC has an Earnings ESP of 0.00% and carries a Zacks Rank #3.
Phibro Animal Health Corporation Price and EPS Surprise
Phibro Animal Health Corporation price-eps-surprise | Phibro Animal Health Corporation Quote
Envista: The company might have continued to gain in the fourth quarter of 2023 within its Speciality Products & Technologies business, banking on strategic development, manufacturing and marketing of dental implant systems, including regenerative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. However, macroeconomic issues might have created significant pressure on the company’s profitability.
The Zacks Consensus Estimate for Envista’s fourth-quarter 2023 revenues is pegged at $632.7 million, suggesting a decline of 4.3% from the year-ago reported figure. The Zacks Consensus Estimate for fourth-quarter 2023 EPS is 34 cents, implying a decline of 34.6% on a year-over-year basis.
Envista has an Earnings ESP of -6.52% and carries a Zacks Rank #5 (Strong Sell).
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Envista Holdings Corporation Price and EPS Surprise
Envista Holdings Corporation price-eps-surprise | Envista Holdings Corporation Quote