Shares of global orthopaedic device company
Wright Medical Group, Inc.
) rose 2.6% till date since the company announced the closure of
its divestment of OrthoRecon business to MicroPort Scientific
Corporation and its affiliates.
In Jun 2013, WMGI announced its decision to sell off the
OrthoRecon unit, which includes products primarily to replace or
repair knee, hip and joints that have deteriorated or have
undergone damage through disease or injury. Management had
classified the OrthoRecon segment as a discontinued operation,
effective from the second quarter of 2013.
Currently, Wright Medical's corporate headquarters and U.S.
operations are located in Arlington, Tenn. Following the closure
of the sale of OrthoRecon, the company will move its corporate
headquarters to Memphis, Tenn.
WMGI's decision to sell off its OrthoRecon unit bodes well for
the company. The division was witnessing weak demand along with
pricing and volume pressure in the underlying orthopedic market.
With the sell-off, Wright Medical plans to pursue growth in the
Biologics and Extremities businesses in the global market.
Wright Medical failed to impress investors with its third-quarter
results. The company posted a wider loss of $8.2 million or 18
cents per share for the quarter compared with $1.6 million or 4
cents in the same quarter of 2012. However, the results met the
Zacks Consensus Estimate.
Reported net loss was $124.5 million or $2.68 per share, compared
with $4.1 million or 11 cents in the third quarter of 2012. Net
revenue increased 13.3% (14% in constant currency) to $57.6
million during the quarter, exceeding the Zacks Consensus
Estimate of $56.0 million.
While announcing the third quarter results, WMGI narrowed its
revenue guidance for 2013 to $237-$240 million from $235-$240
million, incorporating short-term dis-synergies due to the
transaction with MicroPort. The Zacks Consensus Estimate of $239
million for the year lies within the guided range.
However, Wright Medical reiterated its 2013 adjusted earnings per
share guidance of a loss of 55 to 59 cents, based on
approximately 45.3 million shares outstanding. The Zacks
Consensus Estimate of a loss of 57 cents for the year lies within
the guided range.
Currently, WMGI retains a Zacks Rank #3 (Hold). The company
expects to release its fourth-quarter and full-year results on
Feb 24, 2014.
Some better-ranked stocks in the medical product industry include
). All these stocks carry a Zacks Rank #2 (Buy).
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WRIGHT MEDICAL (WMGI): Free Stock Analysis
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