) posted almost flat adjusted earnings per share of 60 cents for
the third quarter of fiscal 2014 compared with 59 cents in the
same quarter a year ago but missed the Zacks Consensus Estimate
by 3 cents. However, adjusted net earnings fell 5.2% to $127
million from $134 million a year ago.
On a reported basis, earnings per share rose 29.7% to 48 cents
from 37 cents and net earnings upped 21.4% to $102 million from
$84 million in the third quarter of fiscal 2013.
Revenues in the quarter rose 7.4% (both in reported and constant
currency) to $968 million, lagging the Zacks Consensus Estimate
of $979 million. The increase was driven by rise in Procedural
Adjusted operating expenses inched up 3.3% to $284 million from
$275 million a year ago, due to recent acquisitions of Vital
Signs, a manufacturer of single-patient-use consumables for
respiratory care and anesthesiology, and Sendal, an infusion
specialty disposable manufacturer in Spain.
Consequently, adjusted operating income fell 2.5% to $196 million
from $201 million a year ago while adjusted operating margin
ebbed 210 basis points (bps) to 20.2% from 22.3% a year ago.
slid 2.2% to $571 million due to stronger Infusion Systems and
Respiratory Technologies business lines in the prior-year
quarter. Adjusted segment profit ebbed 15.1% to $118 million due
to unfavorable revenue mix.
rose 25.2% $397 million, driven by the segment's clinically
differentiated portfolio and contributions from recent
acquisitions. Adjusted segment profit grew 25.8% to $78 million.
CareFusion's board of directors approved a two-year $750 million
share repurchase program, after completing their previous $500
million authorization in June last year. Under the present
authorization, the company repurchased 2.5 million shares for
$103 million in the fiscal third quarter, bringing total
repurchase of 11.5 million for $444 million for the first nine
months of fiscal 2014.
CareFusion had cash and cash equivalents of $1.3 billion as of
Mar 31, 2014, down 29.4% from $1.8 billion as of Jun 30, 2013.
Total debt was almost flat at $1.46 billion as of Mar 31, 2014
compared with $1.45 million as of Jun 30, 2013.
In the first nine months of fiscal 2014, cash flow from operating
activities rose 7.1% to $455.0 million from $425.0 million in the
same period of fiscal 2013. Capital expenditure declined 3.2% to
$61 million from $63 million in the same period of fiscal 2013.
Fiscal 2014 Guidance Upgraded
CareFusion upgraded its revenues and earnings guidance for fiscal
2014. The company now expects revenues to grow between 5 and 7%,
up from the prior range of 4 to 7% and organic revenues to grow
between 2 and 4%, up from the prior outlook of 1 to 4%, both on a
constant currency basis, for the year.
Adjusted earnings are also expected to lie in the previously
guided range of $2.30 to $2.40 per share. The current Zacks
Consensus Estimate of $2.34 lies within the guided range.
Cash flow guidance has been raised to $550 to $600 million from
the previous range of $500 to $550 million.
CareFusion is a global corporation serving the health care
industry with products and services that help hospitals
measurably improve the safety and quality of care. Its products
are considered among top-spending priorities of healthcare
providers given the pressing need for implementing infusion or
However, the transition of product line to Pyxis ES platform is
hampering CareFusions' Medical Systems businesses. The company
continues to see margin compression due to the medical device tax
and unfavorable revenue mix.
Currently, CareFusion retains a Zacks Rank #3 (Hold). Some
better-ranked stocks in the medical products industry include
INSYS Therapeutics, Inc.
Mead Johnson Nutrition Co.
). All of them carry a Zacks Rank #2 (Buy).
CAREFUSION CORP (CFN): Free Stock Analysis
ENZYMOTEC LTD (ENZY): Free Stock Analysis
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