Mindray Beats Earnings Est, Misses Rev - Analyst Blog
07 Maggio 2013 - 10:40AM
Zacks
Chinese medical devices major,
Mindray Medical International Limited (MR)
reported first-quarter 2013 adjusted (excluding one-time expenses
other than stock-based compensation expense) earnings per share of
50 cents beating the Zacks Consensus Estimate of 42 cents.
Reported net income rose 56.8% year
over year to $57.4 million (or 48 cents per share) in the
quarter.
Revenues
Revenues were up 10.5% year over
year to $242.1 million in the first quarter, missing the Zacks
Consensus Estimate of $257 million.
During the reported quarter,
Mindray recorded ex-China sales of $130.8 million, up 2.8% year
over year. Revenues in China increased 21.2% year over year to
$111.3 million in the reported quarter.
Segment-wise
Revenues
Patient Monitoring & Life
Support Products (41.1% of total sales) revenues grew 3.9% year
over year in the reported quarter to $99.4 million. In-Vitro
Diagnostic Products (28.2% of total revenue) revenues were $68.3
million, up 20.7%. Revenues from reagents contributed 36.4% of
In-Vitro Diagnostic segment sales during the quarter.
Medical Imaging Systems (22% of
total sales) sales rose to $53.2 million, up 0.7%. Other revenues
(8.7% of total revenue) were up 52.7% to $21.2 million.
Margins
Adjusted gross profit amounted to
$140.7 million in the quarter, higher by 15.9% year over year.
Adjusted gross margin was 58.1%, higher than 55.5% in the year-ago
period.
Adjusted selling expenses were
$44.9 million, or 18.5% of total net sales, compared with 17.5% a
year ago. Adjusted general and administrative expenses were $24.2
million, or 10% of sales, versus 8.7% a year ago. Adjusted research
and development expenses were $25.3 million, or 10.5% of sales,
compared with 10.7% in the prior-year quarter.
Adjusted operating income stood at
$46.3 million in the quarter, up 14.3% year over year. Adjusted
operating margin was 19.1%, higher than the 18.5% in the year-ago
quarter.
Balance Sheet and Cash
Flow
As of Mar 31, 2013, Mindray had
$891 million in cash and liquid investments, up about 3.3% from a
year ago. Long-term bank loan stood at $59.9 million, up 19.8% from
a year ago.
Outlook
Mindray provides guidance on a full
year basis. The company maintained its forecast for revenue growth
of 17% or more for 2013. It continues to expect adjusted net income
for the year to increase by a minimum of 15% year over year. The
guidance does not take into account tax advantage of $19.4 million
on account of software business status during 2011 and 2012,
received in 2013. The guidance incorporates an income tax rate of
15% for the Shenzhen subsidiary. The forecast for capital
expenditure for 2013 is about $130 million.
Mindray is a bellwether in the
Chinese MedTech industry with a solid international presence. A key
distinction with domestic competitors is that the majority of
Mindray’s products have CE Mark and/or Food and Drug Administration
(FDA) clearance.
Mindray maintains a decent product
pipeline and brings out several new products each year. New
products contribute in a major way to Mindray’s revenues. In 2012,
the company launched 10 new products and acquired four
companies.
The company has entered the premium
segment globally, where its competitive advantage is still unclear.
Moreover, on the negative side, health care reforms in China and
the U.S. may reduce demand for Mindray’s products. Competition is
fierce and will lead to price erosion over time.
The stock carrries a Zacks Rank #2
(Buy). Other stocks such as Accuray Incorporated
(ARAY), Heartware International Inc. (HTWR) and
Intuitive Surgical, Inc. (ISRG) also carry a Zacks
Rank #2 (Buy) and are expected to do well.
ACCURAY INC (ARAY): Free Stock Analysis Report
HEARTWARE INTL (HTWR): Free Stock Analysis Report
INTUITIVE SURG (ISRG): Free Stock Analysis Report
MINDRAY MEDICAL (MR): Free Stock Analysis Report
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