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What's in Store for St. Jude Medical (STJ) in Q2 Earnings? - Analyst Blog

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St. Jude Medical Inc. STJ is slated to release its second-quarter 2015 earnings results on Jul 22. Last quarter, the company beat the Zacks Consensus Estimate by a couple of cents (2.2%). Notably, St. Jude Medical's earnings have outpaced the consensus estimate in the last four quarters, with an average beat of 1.3%.

Let's see how things are shaping up prior to this announcement.

Factors at Play

St. Jude's first-quarter 2015 results reflected strong momentum at the company's Neuromodulation and Atrial Fibrillation (AF) businesses. However, the company provided a cautious guidance for the second quarter, as sales were expected to decline in the range of 4% to 5%. Foreign exchange volatility is expected to impact sales by approximately $125-$135 million. Total sales are expected to lie in the band of $1.37-$1.39 billion.

Nevertheless, we believe that strong momentum at St. Jude's Neuromodulation and AF businesses and a string of regulatory approvals for its new products achieved over the last few months are key growth drivers. We also believe that the company's expanding and innovative product portfolio will drive significant growth over the long haul.

Earnings Whispers

Our proven model does not conclusively show that St. Jude is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.

Zacks ESP : St. Jude currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 99 cents.

Zacks Rank : St. Jude carries a Zacks Rank #3 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies to consider instead as our model shows they have the right combination of elements to post an earnings beat this quarter.

PetMed Express PETS has an earnings ESP of +3.57% and a Zacks Rank #1.

PerkinElmer PKI has an earnings ESP of +1.69% and a Zacks Rank #2.

DENTSPLY Inc. XRAY has an earnings ESP of +1.47% and a Zacks Rank #2.

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PETMED EXPRESS (PETS): Free Stock Analysis Report

ST JUDE MEDICAL (STJ): Free Stock Analysis Report

DENTSPLY INTL (XRAY): Free Stock Analysis Report

PERKINELMER INC (PKI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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