Estimates have moved into the negative territory after
disappointing second quarter results, sending Heska to a Zacks
Rank # 5 (Strong Sell) last month.
About the Company
Heska Corporation (
) sells advanced veterinary diagnostic and other specialty
veterinary products, including diagnostic instruments and
supplies as well as single use, point-of-care tests, vaccines and
The company's core focus is on the canine and feline markets.
Heska acquired a majority interest in Cuattro Vet USA, an imaging
and cloud medical data closing technology company in February
The company reported its second quarter results on August 7,
2013. The quarter resulted in a net loss of $2.2 million, or
$0.38 per diluted share, compared to net income of $262 thousand,
or $0.05 per diluted share, in the second quarter of 2012.
Results were substantially worse than the estimates.
Revenue for the quarter was $18.3 million, down slightly from the
prior-year quarter. Total operating expenses increased to $8.6
million, or 47.1% of sales, from $7.7 million, or 42.0% of sales,
in the prior year period.
Zacks consensus estimates for the current quarter and year are
now in the negative territory-($0.11) and ($0.59) per share
respectively, down substantially from $0.06 and $0.12 per share,
60 days ago. The company has reported a miss in three of
last four quarters, with an average negative surprise of 224%.
The Bottom Line
The management believes that integration of Cuattro Vet
USA has gone extremely well and the combination of the two
companies will result in substantial cost savings through
synergies and reprioritization. But it appears that completion of
integration and realization of synergies is taking longer than
Heska is currently a Zacks Rank #5 (Strong Sell) stock and it
also has a longer-term recommendation of "Underperform". As
such investors may like to avoid the stock for the time being.
Investors seeking exposure to the Bio-medical industry could look
at Affymetrix (AFFX) a Zacks Rank#1 (Buy) stock with an
Outperform recommendation. The company had reported excellent
results for the second quarter.
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