Leading medical devices maker
) is scheduled to report its second quarter fiscal 2012 results
after the closing bell on Wednesday, July 18. The New Jersey-based
company envisions that its sales for the second quarter would grow
4%-7% in constant currency. Moreover, it expects adjusted earnings
in the band of $1.61 and $1.65 a share for the quarter.
The current Zacks Consensus Estimates for revenues and earnings
for the second quarter are $756 million and $1.64 a share,
First Quarter Flashback
C.R. Bard's first quarter 2012 adjusted earnings per share of
$1.61 beat the Zacks Consensus Estimate of $1.57. Profit (as
reported) rose 5% year-over-year to $138.7 million (or $1.60 a
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 the company's Vascular and Oncology business leading
from the front, backed by higher overseas revenues.
On a geographic basis, the U.S. market remained almost stagnant
with just a 2% increase in sales. International revenues spiked 10%
(up 11% in constant currency), boosted by the emerging markets.
Revenues from the core Vascular segment climbed 5% (up 6% in
constant currency), benefiting from the contributions of the SenoRx
acquisition. Oncology sales rose 7% (in terms of both reported and
constant currency) while Urology sales edged up 3% (in terms of
both reported and constant currency). Surgical Specialties division
sales were flat year-over-year.
Estimate Revisions Trend
Estimates for the second quarter elicited somewhat negative
trend over the past week and month. Out of the 15 analysts covering
the stock, one has made a negative revision over the last 7 days
with no instance of upward revision. Over the last 30 days, there
have been two downward revisions with no movement in the positive
No movement has been observed in either direction for fiscal
2012 over the past week. However, estimate revision trend remained
mixed over the past 30 days; where only one analyst (out of 16) has
raised an individual forecast for the fiscal coupled with another
moving in the reverse direction.
Sustained poor growth across Bard's core segments is a cause of
concern for the analysts. A lackluster pricing environment for the
company's offerings and a soft hospital equipment purchase backdrop
in the domestic market continue to remain as overhangs. Also worth
mentioning in this context is the dilutive acquisition of
Estimates for the second quarter have been static at the current
level of $1.64 over the past week and month. For fiscal 2012,
estimates also remained flat at $6.68 per share over the past 7 as
well as 30 days, representing an estimated year over year growth of
With respect to earnings surprises, C.R. Bard has posted three
positive surprises in the preceding four quarters while it met the
Zacks Consensus Estimate on the other occasion. The company has
delivered an average positive earnings surprise of 1.66% over the
past four quarters, implying that it has beaten the Zacks Consensus
Estimate by that measure.
C.R. Bard's well-diversified end-markets and vast product
portfolio insulate it from fluctuations in any single therapeutic
category. The company's resources depth and product leadership are
its major competitive advantages. Most of the company's products
are ranked either first or second in terms of market share.
C.R. Bard is also making prudent use of cash in the form of
acquisitions and share repurchases. This strategy positions Bard in
a positive light amid tough macroeconomic conditions. Moreover the
company's credentials in raising dividends even appeals to
C.R. Bard's incremental R&D investment should boost its
pipeline and give way to product innovation/differentiation.
Several new product launches are expected to support growth moving
forward and to help the company achieve its sales target.
However, heightened competition and pricing/procedure volume
pressure remain areas of concern. C.R. Bard faces a mix of
competitors ranging from large manufacturers with multiple business
Johnson & Johnson
) to smaller manufacturers that offer a limited selection of
Moreover, a soft U.S. market may weigh on the company's second
quarter results. We currently have a Neutral recommendation on C.R.
Bard. The stock currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating.
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