Orthopedic implants and instruments maker
) has revised its guidance for 2013 based on the company's
disappointing first-quarter results as well as a tempered
forecast for the rest of the year.
Symmetry lowered its revenue guidance to the range of $400
million-$415 million from the earlier range of $420 million-$440
million. In 2012, the company generated revenues of $411 million
on a reported basis, up 14% year over year. We note that the
current Zacks Consensus Estimate of $426 million exceeds the
revised projected range.
Revenues in the Original Equipment Manufacturer (OEM) Solutions
segment is anticipated to grow 3% to 6% (on a reported basis)
year over year to the range of $313 million-$323 million. On an
adjusted basis, OEM Solutions revenues are expected to be up 2%
to 5%. Volume pressure in product launches, slower realization of
OEM supplier rationalization efforts along with persisting
austerity measures in Europe is adversely affecting sales of the
company's instrument and case offerings. In 2012, this segment
generated revenues of $303 million on a reported basis, down 5%
year over year.
Revenues from the smaller Symmetry Surgical are expected to
decline 14% to 19% on a reported basis and 7% to 12% on an
adjusted basis to the band of $87 million and $92 million. This
is in sharp contrast to the 171% growth achieved by the business
in 2012 on the back of acquisitions. Now the segment is facing
significant challenges regarding sales disruptions associated
with the integration of Codman surgical instruments business into
The earnings per share (on a reported basis) target has been set
in a range of 11 cents to 21 cents (earlier 35 cents to 47 cents)
for 2013. Adjusted earnings are expected in the range of 40 cents
to 50 cents (earlier 64 cents to 76 cents). This includes a
negative impact of the Medical Devices excise tax of 2 cents
(earlier 3 cents). The adjusted earnings forecast exclude
one-time items such as severance costs, debt issuance costs,
acquisition and amortization-related charges, which are expected
to dilute 2013 earnings by roughly 29 cents a share. The Zacks
Consensus Estimate for 2013 adjusted earnings remains at 63
cents, way above the guided range.
Symmetry also revealed its second-quarter 2013 guidance in the
band of $98 million and $100 million. Adjusted earnings per share
are anticipated between 6 cents and 8 cents. Both the Zacks
Consensus Estimate for second-quarter revenues and adjusted
earnings of $106 million and 15 cents, respectively, are above
the revised projected range.
We are disappointed with the unexpected drop in the outlook for
2013. Further, the sudden change of pace of the high-growth
Symmetry Surgical business due to integration-related problems is
a cause of concern. As a result, Symmetry currently carries a
Zacks Rank #4 (Sell).
While we recommend avoiding Symmetry stocks until management is
able to improve results, other medical stocks such as
) warrant a look. HAE carries a Zacks Rank #1 (Strong Buy), while
the other two stocks carry Zacks Rank #2 (Buy).
ATRICURE INC (ATRC): Free Stock Analysis
BAXANO SURGICAL (BAXS): Free Stock Analysis
HAEMONETICS CP (HAE): Free Stock Analysis
SYMMETRY MEDICL (SMA): Free Stock Analysis
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