Will St. Jude Beat Earnings this Quarter? - Analyst Blog
16 Aprile 2013 - 7:50PM
Zacks
St. Jude Medical Inc. (STJ) is set to report
its first-quarter 2013 results before the opening bell on
Wednesday, Apr 17. Let us see how things are shaping up prior to
the announcement.
In the last quarter, the medical device major posted a 2.22%
positive earnings surprise on the back of strategic realignment
initiatives to reduce operating expenses. However, organic revenue
growth declined.
Factors to Consider this Quarter
New growth drivers such as an innovative product line along with
restructuring efforts to streamline the underlying business will
likely be accretive for STJ in the long term. The company has
received a number of regulatory approvals for its latest offerings
as well as initiated a number of clinical trials in the first
quarter, which is encouraging.
While St. Jude’s business fundamentals remain strong, we are
concerned regarding the uncertainty prevailing at the company’s
core implantable cardiac defibrillators (ICD) business. Domestic
sales are likely to remain dampened until the pending disputes
involving the warning letter issued by the FDA for its Sylmar
facility is resolved. Meanwhile, we expect international revenues
to boost overall revenues.
However, we are cognizant about the ongoing stiff global austerity
measures and difficult healthcare environment. Further, the
Med-Tech medical devices tax is expected to impact margins,
beginning this quarter.
Earnings Whispers?
Our proven model does not conclusively show that St. Jude is likely
to beat earnings estimate this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read: Zacks Earnings
ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to
happen. This is not the case here, as you will see below.
Zacks Earnings ESP: The Most Accurate estimate stands at 91
cents, while the Zacks Consensus Estimate is pegged at 92 cents.
This comes to a difference of -1.09%.
Zacks Rank #3 (Hold): St. Jude’s Zacks Rank #3 (Hold) lowers
the predictive power of ESP. The Zacks Rank #3 together with -1.09%
earnings ESP makes surprise prediction difficult.
Other Stocks to Consider
Here are some other companies from the medical sector you may want
to consider as our model shows they have the right ingredients to
post an earnings beat this quarter:
NuVasive Inc. (NUVA), Earnings ESP of +18.18% and
a Zacks Rank #1 (Strong Buy)
Coventry Health Care Inc. (CVH), Earnings ESP of
+7.69% and a Zacks Rank #1 (Strong Buy)
Hanger Inc. (HGR), Earnings ESP of +8.00% and a
Zacks Rank #2 (Buy)
COVENTRY HLTHCR (CVH): Free Stock Analysis Report
HANGER ORTHOPED (HGR): Free Stock Analysis Report
NUVASIVE INC (NUVA): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
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