On Sep 19, we have upgraded our recommendation on
) to Neutral from Underperform. We are impressed by the company's
second quarter results that beat the Zacks Consensus Estimate on
both earnings and revenues fronts as well as its strong
performance in the overseas markets.
On Jul 31, Thoratec Corporation posted a 12.8% rise in adjusted
earnings to 44 cents per share in the second quarter of the year
from 39 cents a year ago while net earnings improved 9.2% to
$25.7 million from $23.6 million in the 2012-quarter. With this,
earnings surpassed the Zacks Consensus Estimate by 8 cents per
Revenues in the quarter rose 10.0% to $130.5 million, exceeding
the Zacks Consensus Estimate of $121 million. Thanks to the
company's HeartMate product line that contributed $115.7 million
to overall revenues, reflecting a 9% year-over-year increase due
to the expansion of its international business, including the
recent commercial launch in Japan.
Following the release of second quarter results, the Zacks
Consensus Estimate for 2013 earnings remained the same at $1.33
per share. The Zacks Consensus Estimate for 2014 earnings also
remained unchanged at $1.45 per share. With the Zacks Consensus
Estimates remaining unchanged, THOR now has a Zacks #3 Rank
Thoratec has benefited from rapid acceptance of HeartMate II on a
global basis. HeartMate II is clinically adequately effective
enough to provide favorable long-term survival outcomes for
patients who do not have access to donor hearts.
Thoratec also enjoys a monopoly in the U.S. market with this only
device of its kind. In the U.S. DT market, the company faces no
near-term competitive threat as HeartWare's LVAD is not expected
to be launched before 2015.
However, the small size of THOR may restrict its ability to raise
resources. The absence of strategic alliances may hinder its
ability to develop new products
Other Stocks to Look For
Other stocks that are currently performing well in the medical
instruments industry include
Delcath Systems, Inc.
Echo Therapeutics, Inc.
). All of them carry a Zacks Rank #2 (Buy).
CYNOSURE INC-A (CYNO): Free Stock Analysis
DELCATH SYS INC (DCTH): Free Stock Analysis
ECHO THERAPEUT (ECTE): Free Stock Analysis
THORATEC CORP (THOR): Free Stock Analysis
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