Chinese medical devices maker,
Mindray Medical International Limited
) posted an 18.4% rise in adjusted earnings per share to 58 cents
for the 2013-fourth quarter from 49 cents a year ago, and topped
the Zacks Consensus Estimate by 8 cents per share.
Adjusted net earnings rose 18.9% year-over-year to $70.1 million
from $58.9 million in the fourth quarter of 2012. Reported
earnings increased 34.8% to $75.2 million or 63 cents per share
from $55.8 million or 47 cents per share in the 2012-fourth
Net revenues grew 16.5% to $368.4 million, above the Zacks
Consensus Estimate of $348.0 million. International sales
continued to be stronger than the domestic market.
International revenues grew 23.8% to $208.0 million while
revenues from China grew at a slower pace of 8.3% to $160.4
million due to delays in purchasing activities.
Patient Monitoring & Life Support Products
rose 5.7% to $142.8 million from $135.0 million in the prior-year
quarter, contributing 38.8% to overall net revenues.
In-Vitro Diagnostic Products
went up 15.7% to $95.9 million from $82.9 million in the
prior-year quarter, contributing 26.0% to net revenues. Reagents
sales accounted for 41.4% of segment revenues.
Medical Imaging Systems
escalated 28.7% to $97.0 million from $75.4 million in the
2012-quarter, contributing 26.3% to net revenues.
(including sales from the orthopedics business, service revenues
from extended warranties, sales of accessories and repair service
revenues for post-warranty period) zoomed 43.3% to $32.7 million
from $22.8 million a year ago, contributing 8.9% to overall net
Adjusted gross profit rose 12.6% to $207.8 million but gross
margin declined 200 basis points (bps) to 56.4% in the quarter.
Adjusted operating profit went up 14.1% to $72.0 million but
operating margin dipped 50 bps to 19.5% from 20.0% a year ago.
Full Year Results
For full year 2013, MR reported a 25.5% spike in adjusted
earnings per share to $2.07 from $1.65 a year ago and surpassed
the Zacks Consensus Estimate of $1.95. Adjusted net earnings
improved 26.1% to $249.4 million from $197.7 million in the
fourth quarter of 2012.
Revenues in the year scaled up 14.5% to $1,214.0 million,
exceeding the Zacks Consensus Estimate of $1,211.0 million.
Adjusted gross profit was up 14.6% to $693.9 million and gross
margin inched up 10 bps to 19.6% in the year. Adjusted operating
profit went up 13.7% to $238.0 million but operating margin ebbed
10 bps to 19.6% in the year.
MR had $385.2 million in cash and cash equivalents as of Dec 31,
2013, up 55.4% from $247.9 million as of Dec 31, 2012. Total bank
loans more than tripled to $475.7 million from $135.1 million as
of Dec 31, 2012.
In 2013, cash flow from operating activities went down 5.4% to
$307.9 million from $325.7 million in 2012. Capital expenditure
surged 66.3% to $109.1 million compared with $65.6 million a year
MR expects 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 anticipates
capital expenditures of $160 million for the year.
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. MR maintains
a decent product pipeline and brings out several new products
New products contribute in a major way to the company's
revenues. However, a sluggish market in China is a matter of
concern for the company's earnings.
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Currently, MR carries a Zacks Rank #1 (Strong Buy). Other players
that are also performing well in the medical instruments industry
Natus Medical Inc.
Syneron Medical Ltd.
). All of them carry a Zacks Rank #1 (Strong Buy).