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Haemonetics Suffers on Dismal Q4, Poor FY15 Outlook

Zacks Equity Research

On Jun 27, 2014, we issued an updated research report on Haemonetics Corporation (HAE) – a global provider of blood management solutions. Haemonetics delivered an unimpressive fourth quarter of fiscal 2014 with both top and bottom-line miss.

Adjusted EPS slashed 17.9% year over year to 46 cents which missed the Zacks Consensus Estimate of 58 cents. Likewise, revenues of $241.1 million were down 3.5% year over year and also lagged the Zacks Consensus Estimate of $245 million.

According to the company, the ongoing weakness in the U.S. blood collection market, loss of a European tender and order timing in the emerging markets were the major reasons for the lower-than-expected revenues in the Blood center disposables business.

Haemonetics’ blood center revenues in the U.S. continue to remain under pressure with rapid decline in the demand for blood products and the prices hospital pay for blood components.Red cell transfusions in the U.S. also continue to decline with a reduction in transfusion following the release of new guidelines by the American Association of Blood Banks.

All these issues forced the company to provide a lower-than-expected fiscal 2015 guidance that fails to indicate any near-term catalyst that may improve the economic scenario in the near future. The company expects adjusted EPS in fiscal 2015 in the range of $1.85–$1.95. However, the Zacks Consensus Estimate of adjusted EPS of $2.22 lies above the guided range. Moreover, total revenue for the year is expected to decline in the range of 0–2% on a year-over-year basis. The Zacks Consensus Estimate lies near the lower end of the guided range with an estimated decline of 0.05% in revenues in fiscal 2015.

Other Stocks to Consider

While Haemonetics carries a Zacks Rank #5 (Sell), better-ranked stocks worth considering in the medical products sector are ICU Medical, Inc. (ICUI), Cardica Inc. (CRDC) and NeuroMetrix Inc. (NURO). All the three stocks bear a Zacks Rank #2 (Buy).

Read the Full Research Report on HAE
Read the Full Research Report on NURO
Read the Full Research Report on CRDC
Read the Full Research Report on ICUI

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