Murray Hill, NJ-based CR Bard Inc. BCR is scheduled to report fourth-quarter 2016 earnings, after market close on Jan 26.
Last quarter, the company reported adjusted earnings of $2.64, exceeding the Zacks Consensus Estimate by 9 cents and also improving 15.8% from the year-ago quarter. Notably, adjusted earnings were better than management’s guided range.
Meanwhile, the company’s earnings topped the Zacks Consensus Estimate in all the last four quarters with an average beat of 4.07%. Delving deeper into the fundamentals of the stock, let’s see how things are shaping up prior to this quarter.
C.R. Bard Inc. Price and EPS Surprise
C.R. Bard Inc. Price and EPS Surprise | C.R. Bard Inc. Quote
Factors at Play
We believe that the growing adoption of the company’s flagship Lutonix drug coated-balloon (DCB) will continue to be the key growth catalyst for Bard in this quarter as well. In this regard, Lutonix DCB is used to treat patients suffering from peripheral arterial disease (PAD). In fact, within the Endovascular business, peripheral PTA line sales are solely driven by accelerating demand for the Lutonix drug-coated balloon (DCB) in the U.S. We expect to see this product to significantly contribute to the company’s topline in the yet-to-be-reported quarter.
Furthermore, the company's investments in the emerging markets have strengthened its position internationally and are expected to deliver accretive returns in the quarter. We are also upbeat on the solid contribution from the company’s vascular product line. The urology and oncology segments are also likely to drive sales in the quarter.
On the flip side, a challenging Med-tech environment, especially in the hernia fixation and peripheral stent businesses raises concerns. The company continues to witness significant pricing pressure as well. Also, unfavorable foreign currency will continue to hurt top-and bottom-line growth.
Furthermore, uncertainties associated with the possibilities of a repeal of the Affordable Care Act under President Trump add to our concerns.
Estimate Revision Trend
While the company’s fundamentals remain more or less sound, the current quarter’s estimate revision trend points to a different story. Over the past one month, three estimates moved south with none moving in the opposite direction. As a result, the current quarter estimates decreased almost 0.34% to $2.73, over the last 30 days.
Earnings Whispers
Our quantitative model doesn’t point to an earnings beat either this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.