Medical Products Stocks' Earnings Due on Feb 15: WST, ITGR & More
The fourth-quarter reporting cycle for the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification) is almost reaching its end. Quarterly performances have been encouraging so far despite companies still recovering from inflationary pressures, unfavorable foreign exchange headwinds and labor shortages. Several MedTech stalwarts like Boston Scientific and Ecolab delivered mixed results as they grappled with the ongoing macroeconomic issues. A similar trend is expected to be reflected in the results of other industry players.
The latest Earnings Preview indicates that 56.7% of the companies in the Medical sector, constituting nearly 85.8% of the sector’s market capitalization, reported earnings until Feb 7. Of these, 67.6% beat earnings and revenue estimates. Earnings declined 17.7% year over year despite 7% higher revenues.
Overall, fourth-quarter earnings of the Medical sector are expected to decline 18.2% despite a 6.3% sales increase. This compares with third-quarter earnings decline of 16.7% despite 6.6% reported revenue growth. Per the latest trends, the Medical sector is one of the spaces expected to experience the biggest earnings declines in the reporting cycle. It is also one of the six sectors that are predicted to earn less in the fourth quarter of 2023 compared with the year-ago period.
Medical Product Quarterly Synopsis
Integral to the broader Medical sector, Zacks-defined Medical Products companies’ collective business growth is likely to have been significantly dampened by the ongoing macroeconomic threat in the United States and outside. The industry is facing a challenging period due to worsening global trade conditions. This situation is exacerbated by worldwide inflation, which is increasing the costs of raw materials and labor, along with higher medical and freight expenses. Most companies in this sector experienced a surge in the costs of raw materials and other expenses through the fourth-quarter months. Additionally, issues with labor availability, currency headwinds and global supply-chain difficulties are anticipated to have slowed down growth.
On a positive note, legacy-based business recovery through the fourth-quarter months is expected to have been impressive. Additionally, artificial intelligence and robotics for the medical Internet of Things, which came to the forefront during the pandemic phase, remained popular.
Overall, the October-December months were marked by strength in product portfolios and solid customer adoption of products. Medical Product companies like Integer Holdings Corporation ITGR, West Pharmaceutical Services, Inc. WST, AMN Healthcare Services, Inc. AMN and Pacific Biosciences of California, Inc. PACB, popularly known as PacBio, are likely to have been positively impacted by the tailwinds discussed above, despite encountering turbulence on the macroeconomic front.
Let’s observe the status of five MedTech players, who are scheduled to announce results on Feb 15, 2024.
Integer Holdings: Integer Holdings had announced the acquisition of a privately-held technology, engineering and contract manufacturing company, Pulse Technologies, Inc. The transaction closed in early January 2024. Per management, the buyout is consistent with its tuck-in acquisition strategy and is expected to increase Integer Holdings’ end-to-end development capabilities and manufacturing footprint in targeted growth markets. It will also likely provide customers with expanded capabilities, capacity and resources to accelerate products time to market. The latest buyout is expected to add value to Integer Holdings’ Cardio & Vascular segment. The continued strong customer demand across Integer Holdings’ targeted growth markets and the ongoing improvements in the supply-chain environment also look promising for the stock.
The Zacks Consensus Estimate for fourth-quarter 2023 earnings per share (EPS) is pegged at $1.34. Revenues are expected to be $412.1 million.
Integer Holdings Corporation Price and EPS Surprise
Integer Holdings Corporation price-eps-surprise | Integer Holdings Corporation Quote
Integer Holdings does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which increases the odds of an earnings beat. ITGR has an Earnings ESP of -1.36% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
West Pharmaceutical: West Pharmaceutical’s Proprietary Products was an important contributor to its top-line growth in the first nine months of 2023. The segment is likely to have exhibited sustained strength in the fourth quarter as well. WST has been witnessing a strong uptake of high-value products components, which include Westar, Envision and NovaPure offerings. This trend is likely to have continued in the quarter to be reported. (Read more: What's in Store for West Pharmaceutical in Q4 Earnings?)
The Zacks Consensus Estimate for fourth-quarter 2023 EPS is pegged at $1.78. Revenues are expected to be $738.9 million.
West Pharmaceutical Services, Inc. Price and EPS Surprise
West Pharmaceutical Services, Inc. price-eps-surprise | West Pharmaceutical Services, Inc. Quote
WST has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare: AMN Healthcare’s fourth-quarter 2023 revenues are likely to have been aided by continued strength in locum tenens revenues and Language interpretation services revenues. On the third quarter of 2023 earnings call in November 2023, management confirmed that the company had strengthened its ability to deliver multifaceted tech-enabled workforce solutions to simplify labor management and provide a variety of options for making the labor force more flexible and cost effective. Additionally, management believes that clients would be able to access AMN Healthcare’s full set of solutions via its better-integrated sales and service organization. These look promising for the stock.
AMN Healthcare’s acquisition of MSDR in November and its partnership with ALTA Language Services are a few other notable developments.
The Zacks Consensus Estimate for fourth-quarter 2023 EPS is pegged at $1.26. Revenues are expected to be $803.1 million.
AMN Healthcare Services Inc Price and EPS Surprise
AMN Healthcare Services Inc price-eps-surprise | AMN Healthcare Services Inc Quote
AMN has an Earnings ESP of -2.29% and a Zacks Rank #3.
PacBio: PacBio released SMRT Link 13.0 software on the Revio system during the fourth quarter of 2023, which included the adaptive loading feature for consistent run performance, run preview for improved lab efficiency and expanded application support with functionality to sequence shorter and longer fragments of DNA. In October 2023, the company began the shipment of Kinnex RNA kits, thus enabling scalable, cost-effective full-length RNA sequencing on Revio and Sequel IIe. PacBio had also received orders from more than 70 customers through Dec 31, 2023. This raises our optimism about the stock.
The Zacks Consensus Estimate for fourth-quarter 2023 loss per share is pegged at 31 cents. Revenues are expected to be $54 million.
Pacific Biosciences of California, Inc. Price and EPS Surprise
Pacific Biosciences of California, Inc. price-eps-surprise | Pacific Biosciences of California, Inc. Quote
PACB has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).
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AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report
West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report
Pacific Biosciences of California, Inc. (PACB) : Free Stock Analysis Report
Integer Holdings Corporation (ITGR) : Free Stock Analysis Report
