Musculoskeletal implant manufacturer, Globus Medical Inc. (GMED) recently announced preliminary sales result for the fourth quarter and full-year 2014. The company is expected to announce its financial and operating results for the quarter in late February.
Globus Medical expects fourth quarter sales to increase 11.5% on a year-over-year basis, amounting to $128.5 million. If the estimate holds true, the company will manage to beat the current Zacks Consensus Estimate, which is pegged at $122 million.
For 2014, sales are estimated to increase 9.1% year over year to $474 million. Also, the current estimation is higher than the previously issued company guidance of $462–$467 million. The current Zacks Consensus Estimate for the full year stands at $468 million.
For 2015, the company expects sales to gross $510 million, which is lower than the Zacks Consensus Estimate of $519 million. Likewise, earnings are expected to be approximately $1.01 per share, also lower than the consensus estimate by a couple of cents.
The strong top-line growth projection may be primarily attributed to the introduction of innovative products and the expansion of sales footprint. The acquisition of Transplant Technologies of Texas (TTOT) has also been an important development for Globus Medical.
Notably, the acquisition of TTOT has been the company’s largest buyout activity to date. The takeover is already allowing Globus Medical to expand business in regenerative biologics and is also positioning the company better in existing allograft markets. Globus Medical had previously expected TTOT to contribute roughly $2 million to additional sales.
In addition, Globus Medical has remained committed to introducing innovative products through 2014. During the course of the year, the company released 16 new products. In the fourth quarter, the company announced the launch of ALTERA, a new minimally invasive fully articulating expandable spacer for spinal fusion.
We take note that, in the third quarter of 2014, Globus Medical’s sales and earnings had surpassed the respective Zacks Consensus Estimate. Going by the company’s preliminary sales result, another beat seems to be around the corner.
Zacks Rank
Currently, Globus Medical carries a Zacks Rank #3 (Hold). Better-ranked stocks in the Medical Instruments space are AngioDynamics (ANGO), Synergetics USA (SURG) and ABIOMED (ABMD). While Synergetics USA sport a Zacks Rank #1 (Strong Buy), ABIOMED and AngioDynamics has a Zacks Rank #2 (Buy).
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