CR Bard Beats EPS Est., Lags Rev - Analyst Blog

By
A A A

CR Bard Inc. ( BCR ), a global medical technologies and devices company, reported first quarter fiscal 2012 adjusted earnings of $1.61 per share beating the Zacks Consensus Estimate of $1.57 and surpassing the year-ago earnings of $1.51 per share. Adjusted earnings exclude one-time charges of $1 million.

In the reported quarter, profits rose 5% year over year to $138.7 million (or $1.60 a share).

Revenue

Revenues increased 4% (up 5% in constant currency) year over year to $730 million, but fell short of the Zacks Consensus Estimate of $733 million. Year-over-year growth was triggered by healthy sales across the company's Vascular and Oncology segments especially in international markets.

On a geographic basis, revenues in the U.S. and international markets rose 2% and 10% (up 11% in constant currency) to $496.2 million and $233.8 million, respectively. Although the U.S. market remained more or less stagnant during the quarter, international markets, especially emerging markets, grew at a rapid rate.

Segment Analysis

Revenues from the core Vascular segment climbed 5% (up 6% in constant currency) year over year to $209.2 million. Within vascular, endovascular sales grew 9% backed by SenoRx takeover and higher biopsy sales (up 8%). Electrophysiology ("EP") revenues dropped 1%, as higher EP lab systems sales (up 4%) were offset by disposable EP sales (down 2%). Surgical graft sales fell 4% year over year.

Revenues from peripheral PTA surged 8%, driven by the acquisition of Clearstream and Chronic Total Occlusion ( CTO ) sales. Vena Cava Filter sales dipped 5% in the reported quarter.  However, revenues from the stent franchise jumped 14% with LifeStent posting a 22% growth, owing to the discontinuation of a competitor's product line in Japan.

Sales from Urology division increased 3% (both in terms of reported and constant currency) to $185.1 million. Revenues from the basic drainage division was flat year over year and I.C. Foley sales dropped 4%, as these segments faced continued pricing pressure. Continence segment's sales dropped 15% mostly due to the closure of the Contigen product line.  Urological specialties sales crept up 1%, with a 2% rise in brachytherapy sales. Revenues from StatLock catheter stabilization line dipped 1% in the quarter.

The company's Oncology segment reported revenue growth of 7% year over year to $198.9 million. Peripherally inserted central catheters/PICC sales soared 8% while Port revenues rose 4% backed by sustained strong performance in emerging markets. Revenues from vascular access ultrasound products jumped 13% in the quarter.

Sales from Surgical Specialties business were $114.7 million, flat year over year. Soft tissue repair business inched up 1% whereas natural tissue products sales dipped 8% in the quarter. Synthetic hernia products sales jumped 12%, strongly backed by new products. Revenues from hernia fixation business dropped 27%, hurt by increased competition. Performance irrigation business contracted 12% whereas the hemostasis segment surged 23% in the quarter.

Sales from the Other segment were up 4% (up 5% in constant currency) at $22.1 million in the reported quarter.

Margins

Gross margin dropped to 61.7% in the first quarter fiscal 2012 from 62.2% a year ago. Operating margin was 27.4% slightly lower than 27.6% in the year-ago quarter.

Marketing, selling and administrative expenses (as a percentage of sales) remained flat year over year at 27.7%. Research and Development expenses, as a percentage of sales, fell slightly to 6.6% from 6.9%.

Balance Sheet

CR Bard ended first quarter fiscal 2012 with cash, restricted cash and short-term investments of $804.4 million, up 81.9% on a sequential basis. Total debt increased 21.4% sequentially to $1,239 million.

Guidance

For second quarter fiscal 2012, CR Bard expects constant currency revenue growth in the range of 4% to 7%. The company expects adjusted earnings in the band of $1.61 and $1.65 a share.

CR Bard's well-diversified end-markets and vast product portfolio insulate it from fluctuations in any single therapeutic category. We expect new product launches to drive organic revenue growth and help CR Bard to meet its sales objective. The company launched 51 new products last year.

However, increasing competition and pricing/volume pressure remain areas of concern. CR Bard faces strong competition from Boston Scientific ( BSX ), Johnson & Johnson ( JNJ ) and Angiodynamics ( ANGO ). We currently have a Neutral rating on CR Bard. The stock currently retains a Zacks #3 Rank, which translates into a short-term "Hold" recommendation.


 
ANGIODYNAMICS ( ANGO ): Free Stock Analysis Report
 
BARD C R INC ( BCR ): Free Stock Analysis Report
 
BOSTON SCIENTIF ( BSX ): Free Stock Analysis Report
 
JOHNSON & JOHNS ( JNJ ): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ANGO , BCR , BSX , CTO , JNJ

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Author Roger Martin LIVE
Author Roger Martin LIVE            

Stocks

Referenced

Most Active by Volume

139,392,686
  • $5.41 ▼ 18.52%
108,086,733
  • $17.04 ▲ 1.61%
88,411,032
  • $42.085 ▼ 1.19%
35,897,859
  • $101.79 ▲ 0.21%
34,635,836
  • $46.68 ▲ 0.34%
31,162,075
  • $4.36 ▲ 12.37%
31,086,421
  • $26.21 ▲ 0.61%
30,930,862
  • $17.09 ▼ 2.95%
As of 9/18/2014, 04:03 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com