On Dec 14, 2015, we issued an updated research report on VWR Corporation VWR, an independent worldwide provider of products, services and solutions to laboratory and production facilities.
In the third-quarter of 2015, VWR reported in-line earnings with revenues beating the Zacks Consensus Estimate. Although severe currency-related headwind resulted in a year-over-year decline in revenues; supported by several recent strategic initiatives, the company delivered balanced growth in the Americas and EMEA-APAC organically and at CER.
In fact, in the reported quarter, the Americas exhibited solid sequential uptrend representing the sixth consecutive quarter of organic revenue growth on continued strength in biopharma.
VWR’s Americas segment is experiencing an increase in comparable net sales buoyed by several strategic initiatives implemented in recent times. This includes a series of steps undertaken to significantly upgrade its information technology infrastructure, optimize its U.S. distribution network and modify its marketing strategy.
On the other hand, despite the ongoing weakening of the euro and other currencies, which continue to weigh on the company’s EMEA-APAC results, revenues grew 4.2% at CER and 2.9% on an organic basis in the third quarter. Sales to biopharma customers increased in high single digits with significant strong growth in biotech. Production Chemicals continued to exhibit a solid performance while sales to healthcare customers increased in low single digits.
We are also encouraged by the company’s healthy customer base and stable liquidity position. However, the continued year-over-year strengthening of the dollar versus the euro has severely hit VWR’s international business over the past few quarters. In addition, margin pressure and competitive landscape are major downsides.
Currently, VWR carries a Zacks Rank #3 (Hold).
Key Picks in the Sector
Some of the stocks that warrant a look in the medical/dental-supply space are AmerisourceBergen Corporation ABC, Align Technology Inc. ALGN and Cardinal Health, Inc. CAH. All the three stocks hold a Zacks Rank #2 (Buy).
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