Mindray Beats in 4Q, Profit Up

Zacks

Chinese medical devices major Mindray Medical International Limited’s (MR) fourth-quarter 2012 adjusted (excluding one-time expenses other than stock-based compensation expense) earnings per share of 49 cents narrowly beating the Zacks Consensus Estimate of 48 cents. For 2012, adjusted earnings per share of $1.65 missed the Zacks Consensus Estimate of $1.67. Reported net income rose 19.3% year over year to $55.8 million (or 47 cents per share) in the quarter.

Revenues

Revenues were up sharply 19.7% year over year to $316.1 million, in the fourth quarter, beating the Zacks Consensus Estimate of $304 million. For 2012, sales were up 20.4% to $1060.1 million higher than the Zacks Consensus Estimate of $1056 million. 

During the reported quarter, Mindray recorded ex-China sales of $168 million, up 14.7% year over year. Revenues in China increased 25.9% year over year to $148.1 million in the reported quarter. The company performed well in emerging markets.

Segment-wise Revenues

Patient Monitoring & Life Support Products (42.7% of total sales) revenues grew 13% year over year in the reported quarter to $135 million. In-Vitro Diagnostic Products (26.2% of total revenue) revenues were $82.9 million, up 29.8%. Revenues from reagents contributed 36.9% of In-Vitro Diagnostic segment sales during the quarter. 

Medical Imaging Systems (23.8% of total sales) sales rose to $75.4 million, a growth of 15.8%. Other revenues (7.3% of total revenue) were up 45.3% to $22.8 million.

Margins

Adjusted gross profit amounted to $184.8 million in the quarter, higher 27.9% year over year. Adjusted gross margin was 58.5%, higher than 54.7% in the year-ago period.

Adjusted selling expenses were $51.2 million, or 16.2% of total net sales, compared with 19% a year ago. Adjusted general and administrative expenses were $36 million, or 11.4% of sales, versus 6.3% a year ago. Adjusted research and development expenses were $31.9 million, or 10.1% of sales, compared with 9.3% in the prior-year quarter.

Adjusted operating income stood at $65.8 million in the quarter, a year-over-year growth of 24.2%. Adjusted operating margin was 20.8%, higher than the 20.1% in the year-ago quarter.

Balance Sheet and Cash Flow

As of December 31, 2012, Mindray had $862.9 million in cash and liquid investments, up about 42.9% from a year ago. Long-term bank loan stood at $50 million, up 42.8% from a year ago. Net cash generated from operating activities was $144.9 million in the quarter (up 50.2% year over year) while capital expenditure amounted to $18.4 million.

Outlook

Mindray provides guidance on a full year basis. The company forecasts revenue growth of 17% or more for 2013. It also expects adjusted net income for the year to increase by a minimum of 15% year over year. The guidance does not take into account any tax advantage on account of software business status during 2011 and 2012, which might be 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. Also, on the negative side, health care reforms in China and the U.S. may reduce demand for Mindray’s products. Competition is fierce and leads to price erosion over time.

Cyberonics Inc. (CYBX), Given Imaging Ltd. (GIVN) and Novadaq Technologies Inc. (NVDQ) carry a Zacks Rank #1 (Strong Buy ) and are expected to do well.

Read the Full Research Report on MR

Read the Full Research Report on CYBX

Read the Full Research Report on GIVN

Read the Full Research Report on NVDQ

Zacks Investment Research



More From Zacks.com

Rates

View Comments (0)

Recommended for You

  • Tycoon buys 30 Rolls-Royces for Macau hotel

    A Hong Kong tycoon has placed the biggest ever order for Rolls-Royce cars, agreeing to buy 30 Phantoms to chauffeur guests at a luxury resort he's building in the global gambling capital of Macau. Stephen Hung's $20 million purchase surpasses the 14 Phantoms bought by Hong Kong's Peninsula Hotel in…

    Associated Press
  • 1 Tip To Lose Belly Fat

    It's Hollywood's Hottest Diet And Gets Rid Of Stubborn Fat Areas Like Nothing Else.

    AdChoicesagoodcooksSponsored
  • Tycoon's arrest sends shock wave through Russia

    Tycoon's arrest sends shock wave through Russia MOSCOW (AP) — The arrest of a Russian telecoms and oil tycoon has sent shock waves through the country's business community, with some fearing a return to the dark days of a decade ago, when the Kremlin asserted its power by imprisoning the country's…

    Associated Press
  • Before You Buy Alibaba, Check Out 4 Top China Stocks

    Before You Buy Alibaba, Check Out 4 Top China Stocks While investors gear up for Alibaba Group 's (BABA) hotly anticipated initial public offering, don't forget about other Chinese stocks that are worth keeping an eye on. Today's Young Guns Screen of

    Investor's Business Daily
  • As Fed takes baby steps, Cramer's trick for profit

    In turn, Cramer says making money in the market, involves looking at the environment through the lens of the Fed. "The trick is to remember that they speak for the common person," Cramer said. "The Fed wants the common person to make money." With that backdrop always in mind, Cramer says it becomes…

    CNBC
  • "The Retiree Next Door": How successful retirees stretch their savings

    "The Retiree Next Door": How successful retirees stretch their savingsBy the time she hit her late 40s, Toni Eugenia wasn’t sure she would ever be able to retire. Eugenia, 56, a pharmacy technician who lived in Houston, was nearly $200,000 in debt and

    Yahoo Finance
  • Costco Stores in Canada to Stop Taking American Express

    “The credit card relationship between American Express and Costco Wholesale Canada will not be renewed when it expires” on Dec. 31, the company said today in an e-mail to Canadian customers. The message was attributed to Lorelle Gilpin, vice president of marketing and membership for Costco…

    Bloomberg
  • Play

    Citi, Bank of America Offer Discounted Mortgages

    Citigroup and Bank of America will offer mortgages at discounted interest rates to help borrowers with low incomes or subprime credit. AnnaMaria Andriotis joins MoneyBeat. Photo: Getty.

    WSJ Live
  • Master's Degree in Nursing

    CCNE accredited MS in nursing in as few as 18 months online. Learn more today!

    AdChoicesNorwich UniversitySponsored
  • Beanie Babies creator's sentence debated in court

    Beanie Babies creator's sentence debated in court CHICAGO (AP) — Federal prosecutors seeking to put the billionaire creator of Beanie Babies in prison for hiding millions in Swiss bank accounts told appellate court judges Wednesday that the toymaker's sentence of probation threatens to erode the…

    Associated Press
  • Apple to unveil new iPads, operating system on Oct. 21 : report

    The company plans to unveil the sixth generation of its iPad and the third edition of the iPad mini, as well as its operating system OS X Yosemite, which has undergone a complete visual overhaul, the Internet news website said. Trudy Muller, a spokeswoman for Apple, declined to comment. The iPad is…

    Reuters
  • Gilead Stock Is Falling On These Drug Setbacks

    Gilead Stock Is Falling On These Drug Setbacks Gilead Sciences (GILD) shares are backsliding Wednesday on news that the patient drop-out rate for hepatitis C drug Sovaldi is quadruple that of clinical trials. In addition, the biotech's Phase 2 study results

    Investor's Business Daily
  • Don't care about Alibaba? Here's why it may matter

    When the Alibaba Group Holding prices its initial public offering Thursday, small businesses in particular will be watching. Founder Jack Ma -the former English-teacher-turned-dot-com billionaire-has touted his e-commerce platform as a way for smaller merchants to expand their international…

    CNBC
  • CNBC Anchor Calls Out Fed-Hater Bill Fleckenstein In Startling Shouting Match

    CNBC Bill Fleckenstein of Fleckenstein Capital appeared on CNBC's Futures Now program on Tuesday. Futures Now host Jackie DeAngelis came out swinging, asking Fleckenstein right at the top if he was willing to admit that he had misunderstood monetary policy. Sounding taken aback, Fleckenstein…

    Business Insider
  • Here's What Mark Cuban Wishes He Knew About Money In His 20s

    Cuban is the owner of the Dallas Mavericks basketball team. Billionaire investor and entrepreneur Mark Cuban is generous with his advice. When we asked him what he wishes he'd known about money in his 20s, he said:

    Business Insider
  • Norwich Information Security MS

    Online, accredited, top ranked. NSA Center of Academic Excellence. Recognized by the Department of Homeland Security. Download your free brochure!

    AdChoicesNorwich UniversitySponsored
  • Margaritaville casino owners seek bankruptcy

    The owner of Biloxi's Margaritaville casino has filed for Chapter 11 bankruptcy protection Tuesday, only hours before a hearing where the landlord aimed to seize the property. The filing by MVB Holding LLC in U.S. Don Dornan, a lawyer for landlord Clay Point LLC, said the company had planned to ask…

    Associated Press
  • Embraer to sell 50 E-175 jets to Republic in $2.1 billion deal

    Brazil's Embraer SA, the world's third largest commercial planemaker, said on Wednesday it booked a firm order from U.S. The deal, which will be included in Embraer's order book for the third quarter, is valued at $2.1 billion, the planemaker said in a securities filing. The planes will be operated…

    Reuters
  • SHOE COMPANY: Our CEO Just Disappeared And Most Of The Money Is Gone

    "and like that: he's gone." This is an actual headline from a company press release: "CEO and COO disappeared, most of the company's cash missing." (Via FastFT) In a statement, German-based shoe company Ultrasonic said its CFO,  Chi Kwong Clifford Chan, has been unable to reach the company's CEO,…

    Business Insider
  • Play

    Tues., Sept. 16: Watch Humana Stock

    Humana, Global X Social Media Index ETF and Majesco Entertainment are among stocks to watch. WSJ's Chris Dieterich discusses the details with Michael Casey. Photo: Humana

    WSJ Live
  • Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More

    Top Analyst Upgrades and Downgrades: AEP, BHP, GE, Incyte, 3M, Tyco, Under Armour and More Stocks were firm on Wednesday morning ahead of the FOMC meeting outcome. Tuesday’s rally may have sparked higher interest again, and investors are looking for bargains

    24/7 Wall St.
  • Don't buy Alibaba stock: 'Dean of Valuation'

    Investors should steer clear of Alibaba , valuation expert Aswath Damodaran said Wednesday. On CNBC's " Fast Money ," Damodaran, a professor of finance at New York University's Stern School of Business, noted that he was looking at Alibaba stock from the perspective of a long-term investor, not a…

    CNBC
  • Wondering How You Could Save on Home Insurance?

    Get a quote from Farmers Insurance and discover how you could save. Speak with an agent to get the knowledge you need to make an informed decision.

    AdChoicesFarmers InsuranceSponsored
  • Billionaire Investor Says Chinese People Work Harder And Western Companies Could Face Deep Trouble After Alibaba IPO

    Michael Moritz, the chairman of VC firm Sequoia Capital, is a huge fan of Chinese internet companies and reiterated his enthusiasm for the Chinese market in an interview with The Wall Street Journal Wednesday. The billionaire investor described the Alibaba IPO as a “major landmark event” that is as…

    Business Insider