Kinetic Concepts, Inc. (KCI)
Q2 2010 Earnings Call
July 27, 2010 8:30 am ET
Archive for the ‘Healthcare’ Category
Centene Q2 2010 Earnings Call Transcript
On July - 27 - 2010
Cynosure, Inc. Q2 2010 Earnings Call Transcript
On July - 27 - 2010
J&J’s McNeil Problems Are Credit Negative
On July - 27 - 2010
Research Recap submits:
J&J (JNJ) estimated in its second-quarter earnings release that ongoing manufacturing problems within its McNeil Consumer Products unit will result in a $600 million hit to 2010 revenue. The revenue loss results from the May 2010 voluntary shut-down of McNeil’s Fort Washington, Pennsylvania, plant. Separately, on Wednesday, the US Food and Drug Administration (FDA) cited new manufacturing deficiencies at a different McNeil plant in Lancaster, Pennsylvania.
These events are negative for J&J’s credit profile not only because of lost earnings and cash flow, but also because of increasing reputational risk as the deficiencies continue to escalate.
Luxottica Group S.p.A. Q2 2010 Earnings Call Transcript
On July - 27 - 2010
SonoSite Inc. Q2 2010 Earnings Call Transcript
On July - 27 - 2010
WellPoint Earnings Preview
On July - 27 - 2010
Zacks.com submits:
WellPoint Inc. (WLP) is scheduled to report its second quarter results before the market opens on Wednesday, July 28. The Zacks Consensus Estimate for the second quarter is $1.55 per share, representing a growth of about 8.6% over the year-ago quarter.
The company has concerns over the impact of the health reform bill and continued high unemployment, which are expected to overshadow the stock. Further, Wellpoint is expected to report in-line results based on its improving fundamentals.
Earnings Scorecard: Stryker
On July - 27 - 2010
Zacks.com submits:
Second Quarter Revisited
Medical devices giant Stryker Corp. (SYK) produced a mixed bag in the second quarter, matching earnings expectations while missing on the revenue front. Earnings of 80 cents per share came in line with the Zacks Consensus Estimate and net income leapt 9.5% year-over-year, led by healthy growth at the MedSurg Equipment division.
Thermo Fisher Earnings Preview
On July - 27 - 2010
Zacks.com submits:
Thermo Fisher Scientific (TMO) is expected to report its second-quarter fiscal 2010 results before the market opens on Tuesday, July 27, 2010. Following first quarter results, the company had raised its revenue and adjusted EPS guidance for fiscal 2010 to $10.65-$10.80 billion and $3.40-$3.50, respectively.
The current Zacks Consensus Estimate for the second-quarter EPS is 84 cents, which represents an increase of 13.5% from the year-ago quarter. Thermo Fisher has surpassed expectations over the trailing four quarters with a four-quarter positive surprise of 6.79%. This means that the company has beaten the Zacks Consensus Estimate by this magnitude over the last four quarters. Based on this favorable trend, there is a high probability that the company will exceed estimates in the upcoming quarter. In addition, the Zacks Consensus Estimate for revenue is $2.67 billion, representing an annualized growth of 7.7%.
Previous Quarter Highlights
Thermo Fisher reported its first quarter fiscal 2010 EPS of 84 cents, beating the Zacks Consensus Estimate of 75 cents and the year-ago earnings of 62 cents. The company recorded revenues of $2.68 billion, an increase of 19% compared with the first quarter of 2009. Growth was fueled by acquisitions and a favorable foreign currency translation.
Thermo Fisher’s two segments – Analytical Technologies and Laboratory Products and Services recorded revenues of $1.11 billion (18% annualized growth) and $1.70 billion (19%), respectively.
The company witnessed an expansion in margins in the first quarter. Gross margin increased 150 basis points year over year to 42.2%. Adjusted operating and net margins increased 200 bps and 150 bps year over year to 17.5% and 13.1%, respectively.
Agreement of Analysts
Estimates for the second quarter are toward the negative side over the past month, which indicates some potential for downward pressure on the stock. Out of the 13 analysts covering the stock, 3 have lowered their earnings estimates with no positive revisions. During the past week, estimate was lowered by 1 analyst.
Estimate revisions for fiscal 2010 reflect a similar negative bias. Over the last 30 days, 3 of the 14 analysts have lowered their forecasts with one positive revision. During the past week, estimate has been lowered by 1 analyst.
The bearish sentiment for the upcoming quarter reflects the economic concerns, which impact the company. The capital spending environment is constrained in the biopharma and healthcare markets. The industrial market during the first quarter appeared stable with improved capacity utilization and a pick-up in spare part sales. However, some industries such as metals continued to lag. Although these incidents point toward a slowly recovering economy, the benefits of investments will be realized only after a few quarters.
Magnitude of Estimate Revisions
There have been no estimate revisions for the June quarter over the past 7 days. This implies analysts are expecting the company to report in line. However, estimates for the quarter and fiscal 2010 have gone down by a penny over the past month. The current Zacks Consensus Estimate for 2010 is $3.47, reflecting a year-over-year growth of 13.8%.
Recommendation
After a drop in revenues during 2009, Thermo Fisher is back on the growth trajectory with strong first quarter results. A gradual improvement in the economic scenario along with its focus on emerging markets with strong potential should drive its top line in the forthcoming period. However, we remain concerned about the company’s exposure to foreign exchange risk, since it derived about 39% of its fiscal 2009 revenues from international operations. Moreover, any kind of economic turbulence resulting from financial constraints or deferrals in buying decisions of customers could negatively impact the company’s sales.
We are currently Neutral on the stock which corresponds to a Zacks Rank #3 (hold).
Will MannKind’s Afrezza Succeed Where Pfizer’s Exubera Failed?
On July - 27 - 2010
Rockford Coscia submits:
This December, Afrezza, MannKind’s (MNKD) inhalable insulin therapy for prandial (meal-time) management of blood glucose in diabetics, faces FDA decision. Afrezza’s path to approval is well worn and bloodied, most notably by an approval and subsequent market withdrawal of Pfizer’s (PFE) Exubera. Other inhalable therapies have also been attempted by such high-powered partnerships as Alkermes/Eli Lilly (LLY) and Aradigm/Novo Nordisk (NVGN); all abandoned in the wake of Exubera’s withdrawal. Currently Afrezza is the only form of inhaled insulin still under FDA review.
With the market failure of Pfizer’s Exubera, potential investors in MannKind’s endeavor must address why Afrezza will not suffer the same market setbacks assuming a favorable decision by the FDA in December. MannKind has, of course, amassed a number of reasons to convince investors that Afrezza will become a market blockbuster with varying degrees of substance.