Greatbatch, Inc. (GB), producer of batteries, capacitors and components used in implantable medical devices, recently announced preliminary results for full-year 2014 and also provided guidance for 2015.
The company projects impressive top-and-bottom-line performance in the fiscal, although expects to miss expectation on revenue front. Greatbatch is expected to report its fourth-quarter and full-year 2014 financial numbers on Feb 23, 2015.
Greatbatch estimates adjusted earnings per share to increase 13.3% on a year-over-year basis to $2.38 for the full year 2014, higher than the Zacks Consensus Estimate by a couple of cents.
Revenues for 2014 are estimated to grow approximately 3.6% on a year-over-year basis to $688 million. However, the estimated figure is lower than the current Zacks Consensus Estimate of $699 million.
The company also provided financial guidance for full-year 2015.
Revenues in 2015 are expected to exhibit 4–6% growth on a year-over-year basis. However, this projected range is lower than the current Zacks Consensus Estimate of $731 million. Adjusted operating margin is expected to expand 30–50 basis points (bps) to 13.7–14.0%.
Adjusted earnings per share in 2015 is expected to grow twice the rate of revenue growth. The current Zacks Consensus Estimate is pegged at $2.60.
Greatbatch is optimistic about 2015 and expects several of its initiatives to materialize in this year that will further help boost the long-term prospects of the company.
In addition, the company expects to get the U.S. Food and Drug Administration (FDA) approval of its Spinal Cord Stimulation (SCS) system, Algovita, in the first half of 2015. Algovita is primarily used for chronic intractable pain of the trunk and/or limbs. Greatbatch has excluded the commercialization of Algovita from its guidance since the commercialization options are still being evaluated.
Greatbatch also hopes to expand its footprint in the neuromodulation market aided by strong customer relationships and engineering services of CCC Medical Devices, which the company acquired in 2014. Greatbatch also estimates healthy margin expansion, primarily on the back of continuing investments in capabilities, capacity and technologies.
Zacks Rank
Currently, Greatbatch carries a Zacks Rank #3 (Hold). Better ranked stocks in the broader medical sector, that warrant a look, are Inogen (INGN), Synergetics USA (SURG) and ABIOMED (ABMD). While Inogen and Synergetics USA sport a Zacks Rank #1 (Strong Buy), ABIOMED carries a Zacks Rank #2 (Buy).
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