Chinese medical devices maker,
Mindray Medical International Limited
) posted a 15.4% rise in adjusted earnings per share to 45 cents
for the 2013 third-quarter from 39 cents a year ago and met the
Zacks Consensus Estimate.
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Adjusted net earnings rose 15.8% year over year to $54.5 million
from $47.0 million in the third quarter of 2012. However,
reported earnings decreased to $30.1 million or 25 cents per
share from $35.8 million or 30 cents per share in the 2012-third
Net revenues grew 15.3% to $296.3 million, lying below the Zacks
Consensus Estimate of $331.0 million. Unlike the second quarter
of the year, international sales were much stronger than that in
Mindray's domestic market.
International revenues grew 17.9% to $164.3 million while
revenues from China grew at a slower pace of 12.1% to $132.0
million due to delays in purchasing activities in the quarter
under review. Revenues grew impressively by 25% in Western Europe
while some countries in the emerging markets continued to perform
Revenues from Patient Monitoring & Life Support Products rose
6.2% to $110.3 million from $103.8 million in the prior-year
quarter, contributing 37.2% to overall net revenues.
Revenues from In-Vitro Diagnostic Products went up 14.2% to $83.0
million from $72.6 million in the prior-year quarter,
contributing 28.0% to net revenues. Reagents sales accounted for
40.2% of this segment's net revenues.
Revenues from Medical Imaging Systems escalated 26.7% to $77.1
million from $60.9 million in the 2012-quarter, contributing
26.0% to net revenues.
Revenues from Others (including sales from the orthopedics
business, service revenues from extended warranties, sales of
accessories and repair service revenues for post-warranty period)
zoomed 31.2% to $25.9 million from $19.8 million a year ago,
contributing 8.8% to overall net revenues.
Adjusted gross profit rose 15.3% to $167.0 million but gross
margin was flat at 56.4% in the quarter. Adjusted operating
profit went up 8.1% to $54.5 million but operating margin dipped
120 basis points to 18.4% from 19.6% a year ago.
MR had $200.0 million in cash and cash equivalents as of Sep 30,
2013, down 19.3% from $247.9 million as of Dec 31, 2012. Total
bank loans more than doubled to $314.9 million from $135.1
million as of Dec 31, 2012.
In the first nine months of 2013, cash flow from operating
activities inched up 2.7% to $185.7 million from $180.8 million
in the same period of 2012, due to higher net earnings. Capital
expenditure surged 42.2% to $67.2 million compared with $47.2
million a year ago.
Mindray toned down its revenue forecast for the year due to
sluggish hospital purchase trend in China. The company expects at
least 13% rise in revenues over 2012 compared with the prior
forecast of at least 18% for the year. MR also reduced its
capital expenditures guidance to $100 million from $130 million
for the year.
Mindray is a bellwether in the Chinese MedTech industry with a
solid international presence. A key distinction with domestic
competitors is that the majority of Mindray's products have CE
Mark and/or Food and Drug Administration (FDA) clearance. MR
maintains a decent product pipeline and brings out several new
products each year. New products contribute in a major way to the
company's revenues. However, sluggish market in China is a matter
of concern for the company's earnings.
Currently, MR carries a Zacks Rank #2 (Buy). Other stocks that
are also performing well in the medical instruments industry
Natus Medical Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).