St. Jude Medical Inc.
) is set to report its fourth-quarter 2012 results before the
opening bell on Wednesday, Jan 23. Let's see how things are
shaping up prior to the announcement.
In the last quarter, the medical device major posted a 2.47%
positive earnings surprise on the back of improved cost control
measures and strategic realignment initiatives to reduce
Factors to Consider this Quarter
In the preliminary results for the fourth quarter, management
stated that sales growth and cost reduction measures will lead to
improvement in earnings. New growth drivers such as an innovative
product line along with restructuring efforts to streamline the
underlying business will likely be accretive in the future.
While the company's business fundamentals remain strong, we
remain concerned regarding uncertainty prevailing at the
company's core implantable cardiac defibrillators (ICD) business.
The division has recently received a warning letter from the Food
and Drug Administration (FDA) regarding manufacturing and quality
systems-related problems at its Sylmar facility which
manufactures the highly controversial Riata ST Optim and Durata
Our proven model does not conclusively show that St. Jude is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Expected Surprise
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not
the case here as you will see below.
Zacks Earnings ESP
: The Most Accurate estimate stands at $0.90, while the
Zacks Consensus Estimate is also pegged at $0.90. This comes to a
difference of 0.00%.
Zacks #3 Rank (Hold).
St. Jude's Zacks Rank #3 (Hold) lowers the predictive power of
ESP. The Zacks Rank #3 together with 0.00% earnings ESP makes
surprise prediction difficult.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right ingredients to post an earnings
beat this quarter:
), Earnings ESP of 72.73% and Zacks Rank #1 (Strong Buy)
Hill-Rom Holdings, Inc.
), Earnings ESP of 2.27% and Zacks Rank #2 (Buy)
Becton, Dickinson and Company
), Earnings ESP of 3.35%and Zacks Rank #2 (Buy)
BECTON DICKINSO (BDX): Free Stock Analysis
HILL-ROM HLDGS (HRC): Free Stock Analysis
NUVASIVE INC (NUVA): Free Stock Analysis
ST JUDE MEDICAL (STJ): Free Stock Analysis
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