The U.S. Medical Product industry has lately been a highly profitable investment space, courtesy of an ageing populace, changing market dynamics, robotic surgeries, big-data applications, upbeat consumer sentiment, abolition of medical-device taxes, R&D innovations and higher consolidation.
Various reports claim that it is the largest Medical Device market in the world, raking in with over more than $180 billion in revenues.
In view of these trends, the Medical-Products industry has returned 3.7% year to date, in stark contrast to the S&P 500's loss of 0.3%.
Meanwhile, the first-quarter earnings season has also taken center stage, with already 267 members of the elite S&P 500 index having reported financial numbers so far.
Per the latest Earnings Preview , performances of these index participants indicate a 25.1% increase in total earnings on 10% higher revenues. The beat ratio has been impressive as well, with 76.8% companies surpassing bottom-line expectations and 73.8%, outperforming on the top line. The Medical sector (one of the 16 Zacks sectors) has delivered a strong performance. The sector is expected to rise 12.9% on 7% higher revenues.
Given the above trends, it would be rather interesting to see how the major Medical Product companies are placed ahead of the reporting cycle. Let's take a look at four major companies that are set to release results on May 2.
Cerner Corporation 's CERN first-quarter 2018 release is likely to show strong performance in the System Sales segment. Per management, the upside can be attributed to growth in licensed software. However, improvement in other segments should also lead to better results (read more: Can Higher System Sales Drive Cerner's Q1 Earnings? ).
Lately, the company witnessed a slew of developments in its Electronic Health Record ("EHR") platform. The Cerner Millenium EHR has been chosen to be implemented through the new Cerner Integrated Behavioral Health deployment model by Texas-based The Menninger Clinic.
For the first quarter, the Zacks Consensus Estimate for earnings is pegged at 59 cents, while the same for revenues is $1.34 billion, reflecting year-over-year growth of 6%.
Cerner has an Earnings ESP of -0.77% and a Zacks Rank #3 (Hold). Per the Zacks quantitative model, stocks with the advantageous combination of a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 and a positive Earnings ESP have higher chances of beating estimates. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter . Notably, we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Cerner Corporation Price and Consensus
AmerisourceBergen Corporation 's ( ABC ) second-quarter fiscal 2018 results are expected to show steady growth in the Pharmaceutical Distribution segment, a significant contributor to revenues.
Strong organic growth rates in the U.S. pharmaceutical market, improving patient access to medical care, improved economic conditions and population demographics, introduction of new innovative drugs for the likes of hepatitis C along with a consistent good brand-pricing environment should drive growth for AmerisourceBergen in the quarter to be reported (read more: What's in Store for AmerisourceBergen in Q2 Earnings? ).
The Zacks Consensus Estimate for revenues is pegged at $40.49 billion, reflecting a rise of 9% year over year. The Zacks Consensus Estimate for earnings is pegged at $1.83, indicating an increase of 3.4% year over year.
AmerisourceBergen has an Earnings ESP of -1.55% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .
AmerisourceBergen Corporation Price and Consensus
Hologic, Inc. ( HOLX ) will come up with second-quarter fiscal 2018 results. The company is expected to witness stellar performance in the molecular diagnostics unit. In the United States, the company is likely to gain from increasing market share as well as utilization of the fully automated Panther system along with market expansion by conforming to the testing guidelines.
Global growth within molecular diagnostics can be attributed to the Panther system, Hologic's fully automated molecular diagnostics instrument, and frequent utilization of Aptima women's health assays (read more: Can Hologic Diagnostics Growth Recur in Q2 Earnings? ).
For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $780.1million, reflecting a rise of 9.1% year over year. The Zacks Consensus Estimate for earnings is pegged at 53 cents per share, indicating an increase of 6% year over year.
Hologic has an Earnings ESP of +0.94% and a Zacks Rank #4.
Hologic, Inc. Price and Consensus
Masimo Corporation 's ( MASI ) first-quarter results are expected to register strong growth on an expanding product portfolio and wider adoption of its non-invasive patient monitoring technology.
Product revenues are expected to witness impressive growth in overseas markets. New products, including NomoLine capnography, SedLine Brain Function Monitoring and O3 organ oximetry, are expected to contribute to results.
For the quarter to be reported, the Zacks Consensus Estimate for revenues is pegged at $206.2 million, reflecting a rise of 10.7% year over year. The Zacks Consensus Estimate for earnings is pegged at 70 cents per share, indicating an increase of 22.8% year over year.
Masimo has an Earnings ESP of 0.00% and a Zacks Rank #3.
Masimo Corporation Price and Consensus
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