CONMED Corporation (CNMD) has announced preliminary results for full-year 2014 and issued its outlook for 2015. The Utica, NY-based medical technology company is scheduled to report fourth-quarter and full-year financial numbers on Jan 27.
CONMED estimates full-year 2014 revenues in the range of $739–$741 million while adjusted earnings are projected in the band of $1.90–$1.94 per share. The Zacks Consensus Estimate for 2014 adjusted earnings is currently pegged at $1.92 a share.
CONMED also provided adjusted earnings and revenue guidance for 2015. The company expects to generate full-year revenues in the range of $740–$755 million and adjusted earnings in the band of $1.92–$2.02 per share. The current Zacks Consensus Estimate of $1.95 lies within the company’s guided range.
Recently, the company announced a series of changes to its commercial structure in order to reposition itself for growth, including plans to combine the domestic Advanced Energy and Endomechanical organizations.
We note that this will enable CONMED to take advantage of its broad product offering, increase its account coverage, focus on innovation efforts, and leverage its infrastructure. While some of these changes will likely cause sales disruption in the short term, it will eventually position CONMED to generate above-market growth.
CONMED, specializing in the development of surgical instruments and devices for minimally invasive procedures, is greatly benefiting from the increasing trend of using minimally invasive techniques. We believe that this trend is poised to drive the company’s top line in the long run.
However, over 50% of CONMED’s sales are generated from overseas markets. Thus, U.S. manufacturers like CONMED are being hurt by a strengthening U.S. dollar, which has benefited from more upbeat U.S. economic prospects compared to the rest of the world. We feel that the unfavorable foreign currency impact will eventually trickle down to hurt the company’s bottom line as well.
Moreover, CONMED operates in a highly competitive environment and has to counter intense competition from the likes of Johnson & Johnson (JNJ), Medtronic (MDT) and Stryker Corporation (SYK).
Currently, CONMED carries a Zacks Rank #3 (Hold).
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