Specialty orthopedic company, Wright Medical Group, Inc. (WMGI), recently announced preliminary results for the fourth quarter and full year 2014. Wright Medical expects revenues in the fourth quarter to grow 23% (25% on a constant currency basis) on a year-over-year basis to $83.3 million. However it is slightly lower than the current Zacks Consensus Estimate.
Gross margin for the fourth quarter is estimated to be approximately 77%. For 2014, revenues are expected to reach $298.0 million, reflecting year-over-year growth of 23%, both on a reported and a constant currency basis. This is also lower the consensus estimate of $299 million.
The projection for the fourth quarter represents a significant acceleration in the company’s domestic foot and ankle business. The upside may be primarily attributed to an expansion in the product portfolio, made possible by significant product launches and acquired products. The U.S. foot and ankle business is expected to increase 39% on a year-over-year basis, in the fourth quarter of fiscal 2014.
On the other hand, global total ankle growth is likely to be 38%in the quarter primarily on the back of the ongoing launch of INFINITY total ankle replacement system.
Going ahead, Wright Medical expects Upper Extremity and Biologics business to remain soft. However it is expected that the pending merger with Tornier (TRNX) and the final FDA approval of AUGMENT Bone Graft will better the prospects of these two businesses in the future.
The FDA has already completed one of the two facility inspections, required for the final approval of AUGMENT Bone Graft. Wright Medical expects the final approval in late first-quarter 2015.
The merger with Tornier should help Wright Medical create a more diversified and high growth extremities-biologics pure-play with broad reach across 3 of the fastest growing orthopedics markets (shoulder, foot & ankle, biologics). Consequently, this should propel significant revenue growth at the company.
Moreover, the merger will also help Wright Medical fight off stiff competition from the likes of Stryker Corp. (SYK) and Zimmer Holdings (ZMH).
Currently, Wright Medical carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment