Shares of CareFusion Corporation (CFN) reached a new 52-week high of $46.54 in mid-day trading on Sep 4. The company’s shares eventually closed at $45.93 on the same day, translating into an impressive one-year return of 26.5% and a decent year-to-date return of 17.1%.
CareFusion has a market cap of $9.3 billion while average volume of shares traded over the last three months stands at approximately 1.3 million.
Impressive fiscal 2014 fourth-quarter results indicating double-digit bottom-line growth, accretive investments and acquisitions along with solid organic revenue growth across all businesses contributed to the growth trajectory of this medical technology company, creating good momentum for fiscal 2015.
Fourth-quarter adjusted earnings improved a significant 43.6% to 79 cents per share from 55 cents in the year-ago quarter. Adjusted earnings per share also steered past the Zacks Consensus Estimate by 6 cents. For full-year 2014, CareFusion's adjusted earnings per share rose 11.3% to $2.36 from $2.12 a year ago and beat the Zacks Consensus Estimate by 5 cents.
Revenues in the quarter rose 24.3% (both in reported and constant currency) to $1,122 million, exceeding the Zacks Consensus Estimate of $1,043 million. CareFusion’s top-line growth reflected strong contribution from both the company’s reportable segments.
Solid Infusion business sales and strong sales from the Dispensing and Respiratory businesses drove revenues at the Medical Systems segment. Meanwhile, revenues from Procedural Solutions were boosted by contributions from the Vital Signs and Sendal acquisitions, as well as continued growth from clinically differentiated products in specialty disposables, and PleurX drainage products and the ChloraPrep and MaxPlus brands within the Infection Prevention business line.
For fiscal 2015, CareFusion expects revenues to grow between 5 and 7% over fiscal 2014 on a constant currency basis. The company also expects adjusted earnings in the range of $2.60 to $2.75 per share. The current Zacks Consensus Estimate of $2.68 lies within the guided range.
CareFusion also provided three-year guidance till fiscal 2017. The company expects mid-single-digit revenue growth, adjusted operating margins of greater than 23%, and a compound annual growth rate of 10–12% for adjusted earnings per share for the period. CareFusion also plans to invest at least 50% of its free cash flow through tuck-in acquisitions and share repurchases during the period.
Currently, CareFusion carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry include ICU Medical, Inc. (ICUI), Abaxis, Inc. (ABAX), and Eagle Pharmaceuticals Inc. (EGRX). ICU Medical sports a Zacks Rank #1 (Strong Buy), while both Abaxis and Eagle Pharmaceuticals carry a Zacks Rank #2 (Buy).
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