On Apr 8, Zacks Investment Research downgraded
Meridian Bioscience, Inc.
) to a Zacks Rank #3 (Hold) from a Zacks Rank #2 (Buy).
COVIDIEN PLC (COV): Free Stock Analysis
ENZYMOTEC LTD (ENZY): Free Stock Analysis
MERIDIAN BIOSCI (VIVO): Free Stock Analysis
WILLIAM DEMANT (WILYY): Get Free Report
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Why the Downgrade?
Meridian reported its first-quarter fiscal 2014 (ended on Dec 31,
2013) results on Jan 22. Adjusted earnings per share of this
Ohio-based fully integrated life sciences company decreased 10%
year over year to 18 cents. However, Meridian's first-quarter
adjusted earnings per share were in line with the Zacks Consensus
The combined effect of lower sales, deteriorated gross profit
margins and increased operating expenses contributed to this
decline in the quarterly earnings. Moreover, the $400 worth of
medical device tax that was absent in the comparable period last
fiscal, had an adverse effect on the earnings.
Meridian's consolidated revenues declined 1% year over year to
$44.8 million during the first quarter of fiscal 2014. This
decrease in sales was attributable to lower sales in the
company's largest diagnostic focus product family - C. difficile,
respiratory product family as well as the Life Science segment's
immunoassay component business.
Although the decline in revenues was partially neutralized by
increased sales in Meridian's H. pylori focus product family and
the Life Science segment's molecular component business, overall
sales declined as the positives were outweighed by the negative
In addition, Meridian's operating income dropped 11% to $11.6
million during the quarter. Overall increase in spending on new
product development activities combined with addition of field
sales force personnel resulted in approximately a $200 hike in
personnel related expenses, which in turn, accounted for the
decline in operating income. Also, an approximate $500 increase
in the company's stock-based compensation negatively affected
operating income in this quarter.
The Zacks Consensus Estimate for earnings for fiscal 2014
remained flat at 97 cents per share over the last 60 days.
However, for 2015, the Zacks Consensus Estimate dropped 2.8% to
$1.06 over the same period.
Other Stocks to Consider
In the Medical Products space,
William Demant Holding A/S
) are performing well. While Enzymotec holds a Zacks Rank #1
(Strong Buy), Covidien and William Demant retain a Zacks Rank #2