On Nov 29, we retained
) at Neutral, following its not-so-impressive third-quarter 2013
results. Although the company is facing several near-term
hurdles, it has considerable growth opportunities in the long
Why the Reiteration?
On Nov 4, LMNX posted third-quarter 2013 adjusted earnings per
share of a penny, which lagged the Zacks Consensus Estimate of 12
cents by a whopping 91.7%. Adjusted earnings were also down from
the year-ago level of 10 cents per share.
Revenues inched up a mere 1% to $50.8 million, but were lower
than the Zacks Consensus Estimate of $55 million. Molecular
diagnostic-related reimbursement changes implemented by Centers
for Medicare and Medicaid Services (CMS) have been adversely
affecting the entire industry. This issue delayed an order for
Luminex from one of its largest assay customers.
The company's earnings have failed to beat the Zacks Consensus
Estimate just once out of the last 4 quarters with an average
negative surprise of 3.33%. Following the earnings release, the
Zacks Consensus Estimate for 2013 plunged 77.3% to 10 cents per
share. However, the same for 2014 decreased relatively less by
16.7% to 55 cents. Luminex currently has a Zacks Rank #3 (Hold).
Luminex remains cautious about the life science research (LSR)
market given that LSR focused partners have now agreed upon lower
research budgets in the U.S. As a result, the company has lowered
its 2013 revenue guidance to the range of $212−$217 million from
the earlier guided range of $220−$230 million.
Nonetheless, these headwinds are considered to be temporary
setbacks and the company is likely to benefit from new products
and realignment initiatives in the long term. LMNX possesses a
healthy pipeline and works on developing several new assays in
conjunction with its acquired businesses.
Other Stocks to Consider
Investors interested in the medical instruments industry may
consider stocks like
Natus Medical Inc.
). While Natus sports a Zacks Rank #1 (Strong Buy), AngioDynamics
and CryoLife hold a Zacks Rank #2 (Buy).
ANGIODYNAMICS (ANGO): Free Stock Analysis
NATUS MEDICAL (BABY): Free Stock Analysis
CRYOLIFE INC (CRY): Free Stock Analysis
LUMINEX CORP (LMNX): Free Stock Analysis
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