Haemonetics (HAE) New Products Aid, Plasma Sales Remain Tepid
On Nov 30, we issued an updated research report on Haemonetics Corporation HAE. The company has been witnessing recovery in Hemostasis Management units for quite some time now. The stock currently carries a Zacks Rank #3 (Hold).
Over the past three months, Haemonetics has outperformed its industry. The stock has gained 26.8% compared with the industry's 2.2% growth.
Haemonetics exited the second quarter of fiscal 2021 with better-than-expected results. The Hospital business witnessed an uptick in segmental revenues of 2% on an organic basis. In the Hemostasis Management product line, organic revenue growth was 4.1%. This was driven by strong U.S. disposable sales.
The product line had benefited from strong capital equipment sales in the fiscal first quarter, followed by strong sales of TEG cartridges in the second quarter, which drove the overall product line up 3% till the end of the second quarter.
Haemonetics Corporation Price
Haemonetics Corporation price | Haemonetics Corporation Quote
Haemonetics continues to invest in its innovation agenda of clinical trials that build evidence for its hemostasis management products. It is also on track to strengthen its go-to-market model and commercial execution in all key geographies. Notably, the TEG devices continue to play an important role in researching coagulopathy in COVID-19 patients. The company is also modernizing and expanding its Plasma and TEG disposable manufacturing in Pittsburgh, PA.
Gross productivity improvement and cost savings from the Operational Excellence Program and cost-containment actions partially offset the contraction of gross margin, raising optimism.
Haemonetics is upbeat about the FDA’s 510(k) clearance for its NexSys PCS system with Persona technology, which it received in October. The company believes that the Persona technology will significantly strengthen the well-established NexSys value proposition with its ability to safely increase plasma yield. The company collected more than 23,000 liters of plasma by means of a clinical trial, which showed a gain of 8.2% versus the YES technology.
Although Plasma revenues fell 29.9% year over year on an organic basis in the second quarter fiscal 2021, collection volume was up 9% in North America, resulting from the seasonal increase in demand. In Europe, Plasma revenues were up 2% year over year and increased 34% sequentially from the first quarter.
However, in the fiscal second quarter, the decline in Plasma revenues was primarily due to a 32.3% decrease in North American collections compared with the prior year. Despite the gradual lifting of pandemic-led stay-at-home orders, depressed collection volumes persist.
Within Blood Center business, revenues declined 8.6% in the quarter primarily due to COVID-19 related supply constraints.
Key Picks
Some better-ranked stocks from the broader medical space are Hologic, Inc. HOLX, Align Technology ALGN and ResMed Inc. RMD.
Hologic’s long-term earnings growth rate is estimated at 17.4%. It currently sports a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
Align Technology has a projected long-term earnings growth rate of 18.3%.The company presently carries a Zacks Rank #2 (Buy).
ResMed’s long-term earnings growth rate is estimated at 14.5%. The company presently carries a Zacks Rank #2.
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