We expect medical products developer
) to beat expectations when it reports its fiscal
2014-fourth-quarter results on May 1, 2014.
Why a Likely Positive Surprise?
Our proven model shows that ABIOMED is likely to beat earnings
because it has the right combination of two key ingredients.
Expected Surprise Prediction or
represents the difference between the Most Accurate estimate and
the Zacks Consensus Estimate. ABIOMED has a Zacks ESP of
+175.00%. This is very meaningful and a leading indicator of a
likely positive earnings surprise for shares.
ABIOMED carries a Zacks Rank #3 (Hold). Note that stocks with
Zacks Ranks #1, 2 and 3 have a significantly higher chance of
beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of ABIOMED's Zacks Rank #3 (Hold) and +175.00%
ESP makes us confident of a possible positive earnings beat on
May 1. It is worth noting in this context that ABIOMED has
delivered positive surprises in 3 of its last 4 quarters, with an
average beat of 73.41%.
What is Driving the Better-than-Expected
In the fiscal 2014-third quarter, ABIOMED posted adjusted
earnings of 11 cents per share, surpassing the Zacks Consensus
Estimate by 7 cents and the company's year-ago quarter's adjusted
earnings by 57.1%.
In the quarter, the company experienced a record 21%
year-over-year growth in revenues to $46.2 million, accompanied
by a 21% improvement in U.S. Impella revenues of $37.7 million.
Growth in this quarter's revenues is consistent with the
company's consistent track record of double-digit revenues growth
for 17 consecutive quarters.
The primary driver behind ABIOMED's soaring revenues is Impella -
a breakthrough patent platform, which provides minimally invasive
procedures for percutaneous circulatory support to treat a
growing population of high-risk patients. Impella is now in use
in over 800 hospitals under 2000 trained physicians, and this is
only likely to grow more with time.
Furthermore, the company's gross margin improved by 80 basis
points to 79.5% in the last reported quarter, primarily due to
higher production volumes and improved yields. Research and
development expenses increased 23.8% to $7.8 million, induced by
expenditures to support ongoing product development and clinical
initiatives, including the Impella RP trial, and to support
regulatory filings in the U.S. and Japan.
Based on its impressive performance in the past quarter, ABIOMED
reiterated its fiscal 2014 revenue guidance in the range of
$180-$185 million, with Impella growth expected to be
approximately 20% for the year. The company also expects its
operating margin to remain in the range of approximately
breakeven to 5% in fiscal 2014.
Other Stocks to Consider
ABIOMED is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
Myriad Genetics Inc.
), earnings ESP of +10.87% and a Zacks Rank #1 (Strong Buy).
LDR Holding Corp.
), earnings ESP of +26.32% and a Zacks Rank #2 (Buy).
), earnings ESP of +1.72% and a Zacks Rank #2 (Buy).
ABIOMED INC (ABMD): Free Stock Analysis
LDR HOLDING (LDRH): Free Stock Analysis
MYRIAD GENETICS (MYGN): Free Stock Analysis
TELEFLEX INC (TFX): Free Stock Analysis
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