Leading medical devices maker C.R. Bard (BCR) is slated to announce its second- quarter 2011 results after the closing bell on Thursday, July 21.
The New Jersey-based company expects its sales for the quarter to grow 6%-8% in constant currency. Moreover, it expects adjusted EPS between $1.53 and $1.57.
The current Zacks Consensus Estimates for revenues and earnings are $728 million and $1.57 a share, respectively.
First-Quarter Recap
C.R. Bard’s first quarter fiscal 2011 earnings of $1.51 per share beat the Zacks Consensus Estimate by a nickel while profit climbed 9% year over year on the back of healthy contributions from the company’s core vascular business.
Revenues jumped 8% year over year to $700.3 million, also beating the Zacks Consensus Estimate of $694 million. The Vascular segment had yet another strong quarter with revenues growing at a double-digit clip, buoyed by healthy sales from both domestic and international operations.
Within the Vascular franchise, endovascular, peripheral PTA and stent businesses grew in the quarter, partly offset by lower vena cava filter sales. Electrophysiology sales fell modestly in the quarter. Endovascular sales were fueled by a solid growth in biopsy products sales, strongly backed by the SenoRx acquisition.
Oncology sales climbed 7% in the quarter on the back of growth across peripherally inserted central catheter/PICC, ports, vascular access ultrasound products and dialysis catheter businesses.
Estimate Revisions Trend
Agreement
Estimates for the second quarter demonstrate a lack of movement over the past week. However, there have been a couple of downward revisions over the past month with no reverse movements. The current Zacks Consensus Estimate of $1.57 represents an estimated 13.07% year-over-year growth.
For fiscal 2011, no activity has been observed over the past 7 days, as none of the 19 analysts made revisions in either direction. There has been one positive and negative revision over the last 30 days.
Magnitude
The magnitude of revisions for the second quarter has been stationary over the past week and month. A similar trend applies to the estimate for fiscal 2011. The current Zacks Consensus Estimate for fiscal 2011 is $6.41, representing estimated year- over-year growth of 14.41%.
Neutral on C.R. Bard
C.R. Bard’s well-diversified end-markets and vast product portfolio insulate it from fluctuations in any single therapeutic category. The company’s resource depth and focused innovation are its major competitive advantages.
C.R. Bard has a reasonably strong pipeline with several new product launches expected to support growth (including hernia repair products, ablation system for atrial fibrillation and PICC/ports line extensions). The SenoRx acquisition has expanded the company’s product portfolio beyond its existing product range meant for ultrasound imaging. SenoRx is expected to continue driving top line in the second quarter.
We expect new product flow and sales force consolidation to drive organic revenues growth and help C.R. Bard to meet its sales objective. Moreover, incremental R&D investment should boost the pipeline and give way to product innovation/differentiation. The company is also making prudent use of cash in the form of acquisitions and share repurchases.
However, heightened competition (especially in soft tissue repair) and pricing/volume pressure remain areas of concern. C.R. Bard faces a mix of competitors ranging from large manufacturers with multiple business lines like Boston Scientific (BSX) and Johnson & Johnson (JNJ) to smaller manufacturers that offer a limited selection of products like Angiodynamics (ANGO).
The pricing environment has been soft for most of the devices offered by the company. Our Neutral rating on C.R. Bard is in line with a short-term Zacks #3 Rank (Hold).
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