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Reiterate CONMED at Neutral

Zacks Equity Research

On Mar 6, 2013, we retained CONMED Corporation (CNMD) at Neutral after the company beat Zacks Consensus Estimates for earnings and revenue for fourth quarter 2012.

Why the Retention?

CONMED released its results for the fourth quarter on Feb 14. The company posted adjusted earnings per share of 52 cents per share, better than the Zacks Consensus Estimate of earnings of 50 cents a share. Revenues in the reported quarter surged 8.4% (7.8% in constant currency) year over year to $201.2 million, beating the Zacks Consensus Estimate of $200 million.

Over the past 30 days, the Zacks Consensus Estimate for 2013 has remained static at $1.85. For 2014, the Zacks Consensus Estimate has dropped by a penny to $2.01 during the same timeframe.

CONMED expects adjusted earnings in a range of 42 cents to 47 cents for the first quarter of 2013. Revenues are projected to remain in the band of $192 million and $198 million.

CONMED reiterated its outlook for 2013. Revenues are anticipated between $785 million and $795 million in 2013. CONMED expects adjusted earnings to be in the band of $1.80 and $1.90 per share for 2013, reflecting about 5% growth in earnings per share.

CONMED derives roughly 80% of its total revenues from single-use disposable products, which remain the mainstay of its business. The balance 20% of revenue comes from sales of capital equipment which creates demand for single-use items in a ‘razor-razor blade model’. A large percentage of CONMED’s products are designed for minimally invasive surgery, a trend that is extremely popular these days.

Other Stocks to Consider

We currently have a Zacks Rank #4 (Sell) on CONMED. We are more positive about Becton, Dickinson and Company (BDX), The Cooper Companies Inc. (COO) and Henry Schein, Inc. (HSIC) each of which carry a Zacks Rank #2 (Buy) and are expected to do well.

Read the Full Research Report on CNMD

Read the Full Research Report on BDX

Read the Full Research Report on HSIC

Read the Full Research Report on COO

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