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Will Healthcare Arm Drive BioTelemetry's (BEAT) Q3 Earnings?

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BioTelemetry, Inc. (BEAT - Free Report) is set to report third-quarter 2018 results on Oct 30, after market close.

The company delivered an earnings surprise of 48.4% in the last reported quarter. BioTelemetry beat the consensus mark in three of the preceding four quarters, the average beat being 30.9%.

Let’s take a look at how things are shaping up prior to this announcement.

Factors to Consider

BioTelemetry’s third-quarter revenue growth is likely to have been driven by strength in the Healthcare business, which saw a stupendous 96.8% revenue growth in the second quarter of 2018. Notably, the Healthcare revenue increase was largely due to a 70% rise in Healthcare patient volume stemming from the LifeWatch acquisition. The company also met the high end of its synergy targets for the LifeWatch acquisition in the last reported quarter.

The company is also expected to continue seeing organic revenue growth within the Healthcare arm in the to-be-reported quarter. Riding on successful launches of the next generation mobile cardiac telemetry (MCT) systems and extended wear Holter devices in a patch form factor, BioTelemetry has been seeing rising patient volumes along with a favorable payor mix.

BioTelemetry, Inc. Price and EPS Surprise

 

These developments are expected to continue boosting the top line in the third quarter of 2018. Management expects to continue seeing double-digit MCT and solid extended Holter growth in the near term.

However, management cautioned about some seasonal softness in the Healthcare business is generally observed in the third quarter.

Similar to the previous quarter, BioTelemetry is expected to see strength in the Research segment. Led by increased imaging volume from oncology studies as well as rising cardiac revenues from early phase studies, the company saw a 31.2% increase in Research revenues in the last reported quarter. Notably, it was the third-consecutive quarter of at least 20% growth.

We are also optimistic about the research backlog which is rising at a good rate over the past few quarters and is getting impressively converted into revenues. Moreover, supported by a 75% rise in dual-service studies since the beginning of 2018, the pipeline for future bookings is at an all-time high. This bullish trend is expected to continue driving the top line in the yet-to-be reported quarter.

For the third quarter of 2018, the company projects sales between $97 million and $97 million.

Overall, third-quarter total revenues are projected at $97.9 million, indicating a rise of 20.9% from the prior-year quarter.

Here’s What Our Quantitative Model Predicts:

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

BioTelemetry has a Zacks Rank #1 and an Earnings ESP of 0.00%, a combination that does not hint at an earnings beat.

The Zacks Consensus Estimate for earnings of 32 cents reflects a massive 100% surge on a year-over-year basis.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat in their upcoming quarterly results.

Baxter International Inc (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo Corporation (MASI - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank #2.

Luminex Corporation (LMNX - Free Report) has an Earnings ESP of +54.76% and a Zacks Rank #3.

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