Medical Products Stock Earnings on Nov 2: IDXX, STE & More
With the pandemic raging on, testing, vaccine and therapeutic makers are witnessing huge market adoption of their COVID-related support products in Q3.
The latest Earnings Preview reflects a stable quarterly performance for the Medical sector so far this reporting cycle. Going by the sector’s scorecard, 25.5% of the companies in the Medical sector, constituting nearly 47.6% of the sector’s market capitalization, reported earnings till Oct 27. Of these, 78.6% beat earnings estimates and 85.7% beat the same for revenues. Earnings increased 19.6% year over year on 12.1% higher revenues.
This scorecard reflects stability in the United States on the gradual reopening of the economy even amid the rise of the Delta variant. However, supply chain-related disruption is still prominent due to international restrictions across many geographies. Also, many parts of the COVID-affected international market are still suffering due to lower cash flows and difficult economic conditions.
Overall, third-quarter earnings for the Medical sector are expected to rise 19.5% on a 12.6% sales increase. This compares with Q2’s reported earnings growth of 32.1% and revenue growth of 21.3%.
Medical Products Quarterly Synopsys
The dynamic nature of the COVID-19 crisis is fast transforming the medical products industry’s landscape. The Medical Products companies’ (within the broader Medical sector) collective business growth improved significantly in Q2, driven by the gradual lifting of restrictions. But the Q3 reporting cycle so far has shown a steep sequential decline in terms of the legacy base business of the companies.
However, thanks to the fiscal and monetary stimulus and mass vaccination drive in the nation and outside, the process of reopening the economy never stopped. The ongoing reporting cycle shows that hospital visits and hospital base businesses saw a temporary softness through July and August but revived strongly in September.
On the other hand, with the increase in the number of cases, testing, vaccine and therapeutic makers witnessed huge market adoption of their COVID-related healthcare support products and services in Q3.
More specifically, the third-quarter results of the medical product stocks so far have shown temporary retraction of the base business compared to the second quarter. At the same time, diagnostic testing stocks, which had registered a slowdown in demand for COVID-19 testing in Q2, picked up momentum in Q3, in line with industry trends.
The Zacks Medical Product sector currently carries a Zacks Sector Rank in the bottom 38% (156 of 254 industries).
Let’s take a look at four Medical Products players scheduled to announce results on Nov 2.
IDEXX Laboratories, Inc. IDXX: In the third quarter, IDEXX’ Companion Animal Group (CAG) business is expected to have gained from consistent and healthy organic revenue growth, backed by strong organic CAG diagnostics recurring revenue growth in the United States and internationally. Robust growth in the U.S. clinical business is likely to have contributed to U.S. CAG Diagnostic recurring revenue gains. On its second-quarter earnings call, the company noted U.S. clinical visit growth of 13%, with strength across ‘nonwellness’ and ‘wellness’ visit categories. The CAG arm is likely to have gained from organic growth in CAG diagnostic instrument revenues, as it did in the prior quarter. (Read more: IDEXX to Report Q3 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.88. Revenues are expected to be $793.3 million.
IDEXX has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — which increases the odds of an earnings beat.
The company has an Earnings ESP of +2.77% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
IDEXX Laboratories, Inc. Price and EPS Surprise
STERIS plc STE: The company’s Applied Sterilization Technologies (AST) arm is likely to have gained from increased demand from medical device customers in the second quarter of fiscal 2022, as it did in the previous quarter. The company expects this arm to have remained strong as its core medical device customers continue to benefit from the rebound in procedures and rebuilding of some inventory. In addition, demand for COVID-related products and vaccines as well as bioprocess manufacturing disposables is anticipated to have remained robust, benefitting the AST arm. (Read more: STERIS to Report Q2 Earnings: What's in the Cards?)
The Zacks Consensus Estimate for the second quarter of fiscal 2022 is pegged at earnings per share of $1.83. Revenues are expected to be $1.16 billion.
The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy).
Henry Schein, Inc. HSIC: Per Henry Schein’s August 2021 update, the company has been witnessing strengthening demand in the global dental and medical markets on the gradual reopening of practices and stable patient traffic globally over the past few months, even in countries with more stringent lockdown rules. This recovery trend is likely to have continued through the entire third quarter of 2021, thus boosting the company’s top line. (Read more: What's in Store for Henry Schein in Q3 Earnings?)
The Zacks Consensus Estimate for the third quarter is pegged at earnings per share of 94 cents. Revenues are expected to be $2.94 billion.
The company has an Earnings ESP of +1.06% and a Zacks Rank #2.
Henry Schein, Inc. Price and EPS Surprise
Omnicell OMCL: Since the past few months, Omnicell has been gaining from the strength of its business model and strategic market positioning. Amid the pandemic, the company’s healthcare system and retail pharmacy customers have shown greater acceptance of the fully autonomous pharmacy. Accordingly, demand for Omnicell’s end-to-end automation solutions has gained traction. The company, in August, noted that it’s on track to reach its five-year outlook target company initiated earlier this year. All these developments are expected to have strongly contributed to the company’s third-quarter 2021 top line.
The Zacks Consensus Estimate for third-quarter earnings per share is pegged at 91 cents. Revenues are expected to be $283.8 million.
The company has an Earnings ESP of 0.00% and a Zacks Rank #2.
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