Chinese medical devices maker,
Mindray Medical International Ltd.
) posted a disappointing 34.0% fall in adjusted earnings per
share to 33 cents for the 2014-first quarter from 50 cents a year
ago and missed the Zacks Consensus Estimate by 3 cents per share.
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MINDRAY MEDICAL (MR): Free Stock Analysis
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Adjusted net earnings dipped 35.7% year-over-year to $38.5
million from $59.8 million in the first quarter of 2013. Reported
earnings decreased 37.5% to 30 cents per share from 48 cents per
share in the 2013-quarter or 37.9% to $35.6 million from $57.4
million in the year-ago quarter.
Net revenues grew 9.4% to $264.8 million, lying below the Zacks
Consensus Estimate of $291 million. International sales continued
to be stronger than the domestic market sales.
International revenues upped 13.9% to $148.9 million while
revenues from China grew at a slower pace of 4.0% to $115.8
million due to sluggish purchasing and marketing activities in
the healthcare sector.
Patient Monitoring & Life Support Products
fell 1.4% to $98.0 million, contributing 37.0% to overall net
revenues. Revenues from
In-Vitro Diagnostic Products
went up 6.8% to $73.0 million, contributing 27.6% to net
revenues. Reagents sales accounted for 38.1% of segment revenues.
Medical Imaging Systems
escalated 27.1% to $67.6 million, contributing 25.5% to net
revenues. Revenues from
(including sales from the orthopedics business, service revenues
from extended warranties, sales of accessories and repair service
revenues for post-warranty period) zoomed 23.6% to $26.2 million,
contributing 9.9% to overall net revenues.
Adjusted gross profit rose 5.3% to $148.0 million but adjusted
gross margin declined 210 basis points (bps) to 55.9% in the
quarter. Adjusted operating profit went down 16.5% to $34.7
million, while operating margin dipped 410 bps to 13.1% from
17.2% in the 2013 first quarter.
MR had $419.8 million in cash and cash equivalents as of Mar 31,
2014, up 9.0% from $385.2 million as of Dec 31, 2013. Total bank
loans fell 10.6% to $425.2 million from $475.7 million as of Dec
In the quarter, cash flow from operating activities plunged 53.6%
to $19.7 million from $42.4 million in the 2013-quarter. Capital
expenditure rose 39.1% to $27.9 million compared with $20.0
million a year ago.
MR continues to expect 2014 net revenues to grow at least 15%
over 2013 based on strengths in Western Europe and some emerging
markets as well as gradual improvement in China. The company also
reiterated its capital expenditures guidance of $160 million for
MR is a bellwether in the Chinese MedTech industry with a solid
international presence. A key distinction with domestic
competitors is that the majority of its products have CE Mark
and/or Food and Drug Administration (FDA) clearance.
However, falling earnings disappointed investors and the
company's results fell short of both the earnings and revenues
estimates. Currently, MR carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the medical instruments industry
Delcath Systems, Inc.
Edwards Lifesciences Corp.
). While Delcath Systems sports a Zacks Rank #1 (Strong Buy),
both Accuray and Edwards Lifesciences retain Zacks Rank #2