MedTech Stock Earnings on Feb 2: IDXX, MCK & More
Looking at the earnings picture so far, it is quite clear that the Medical sector (one of the 16 broad Zacks sectors within the Zacks Industry classification) has once again shown better resilience compared to many others amid the coronavirus-led economic rout. Per the latest Earnings Preview, Medical is one of the six among the 16 major Zacks sectors set to report year-over-year revenue growth. The sector is expected to report 8.2% earnings growth and revenue growth of 11.4% this time around.
However, both the earnings and revenue projections indicate a decline from the third-quarter 2020 scorecard, which reflected earnings growth of 15.1% on 11.8% revenue growth. This sequential slack, we believe, is likely to have stemmed from the last two months of Q4 that witnessed the emergence of new strains of coronavirus that are claimed to be 56% more contagious.
Integral to the broader Medical sector, MedTech or Zacks-defined Medical Products companies’ collective business growth is likely to have improved from the last reported quarter with month-wise rebound in base sales volumes on gradual lifting of restrictions in many states and regions. In the fourth quarter, these companies have been observed to appropriately invest in virtual physician education, remote clinical support and digital sales enablement suitable for healthcare support amid the pandemic. Besides, testing, vaccine and therapeutic makers have been riding on huge market adoption of their COVID-19-related healthcare-support products and services.
Already, many of these companies have come up with bullish earnings reports so far this reporting cycle.
However, some of the MedTech companies, particularly those with a huge international base witnessed a notable reduction in product demand across their core business segments and geographies in Q4 as well.
The Zacks Medical Product sector currently carries a Zacks Sector Rank in the bottom 16% (213 of 253 industries).
Let’s take a look at four MedTech market leaders scheduled to announce results on Feb 2.
IDEXX Laboratories IDXX: IDEXX is expected to have sustained its strong earnings trajectory in the Companion Animal Group (“CAG”) Diagnostic arm in the fourth quarter on high CAG diagnostic recurring revenues and continued high customer retention. The segment is also likely to have maintained strength in recurring service revenues. The company, over the past few months, continued with the installation of its Sedivue Dx, a trend which is likely to have continued through the fourth quarter.
The Zacks Consensus Estimate for the fourth quarter is pegged at earnings per share of $1.43. Revenues are expected to be $679.3 million.
IDEXX Laboratories, Inc. Price and EPS Surprise
IDEXX Laboratories, Inc. price-eps-surprise | IDEXX Laboratories, Inc. Quote
IDEXX does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — which increases the odds of an earnings beat. IDEXX has an Earnings ESP of -0.87% and a Zacks Rank #2 (Buy).
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
(Read more: What's in Store for IDEXX Laboratories in Q4 Earnings?)
McKesson Corporation MCK: Growing demand for COVID-19 tests and personal protective equipment (PPE) in the Primary Care and Extended businesses is likely to have favored the company’s Medical-Surgical solutions segment’s third-quarter fiscal 2021 revenues. The consensus mark for this segment’s revenues is pegged at $2.76 billion, indicating an improvement of 28.8% from the prior-year quarter. Further, the U.S. Pharmaceutical and Specialty Solutions segment might have acted as a key catalyst in the quarter to be reported. The consensus mark for this segment’s revenues is pegged at $49 billion, indicating an improvement of 4.4% from the prior-year quarter.
McKesson has a Zacks Rank #3 and an Earnings ESP of -1.63%.
(Read more: McKesson to Report Q3 Earnings: What's in the Offing?)
McKesson Corporation Price and EPS Surprise
McKesson Corporation price-eps-surprise | McKesson Corporation Quote
STERIS plc STE: After a choppy performance over the past few months, STERIS is expected to have recorded month-wise rebound in sales on gradual lifting of restrictions in many states and regions. Also, in the third-quarter of fiscal 2021, the company might have experienced better performance as far as deferrable procedures are concerned with hospitals gradually reopening their non-COVID-19 departments in a full-fledged way and opening up physician offices and clinics.
STERIS has a Zacks Rank #3 and an Earnings ESP of 0.00%.
(Read more: STERIS to Report Q3 Earnings: What's in the Cards?)
STERIS plc Price and EPS Surprise
STERIS plc price-eps-surprise | STERIS plc Quote
Haemonetics Corporation HAE: In its third-quarter fiscal 2021, Haemonetic’s Hospital business is once again expected to have recorded strong sales along with an uptick in the Hemostasis Management product line. Gross productivity improvement and cost savings from the Operational Excellence Program and cost-containment actions are expected to have improved margins. Strong end-market demand along with new product launches also buoy optimism.
Haemoneticshas a Zacks Rank #3 and an Earnings ESP of 0.00%.
Haemonetics Corporation Price and EPS Surprise
Haemonetics Corporation price-eps-surprise | Haemonetics Corporation Quote
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