With the Q2 earnings season in full swing by now, so far 126 S&P 500 members (as of Jul 22) have already reported their quarterly numbers. Analysts are still in conflict about whether this season will be the 5th quarter in a row of an earnings decline for the S&P 500 index or a considerable recovery will be witnessed compared to the previous year’s outcome. Amid such doubts, Medical remains one of the few sectors anticipated to deliver according to its investors’ expectation.
As per our latest Earnings Trend Report, while conventional heavyweight sectors like Oil/Energy, Finance, Technology along with some of the other of 16 Zacks sectors are projected to perform poorly, only 7 sectors are predicted to report positive year-over-year growth. Encouragingly, Medical is one such sector.
To be precise, for the entire S&P 500 group, total earnings are expected to be down 3.4% on a year-over-year basis with a 0.5% decline expected in the top line. Medical on the other hand is expected to reverse the trend with ease as earnings are expected to grow 1.8% driven by impressive top-line growth of 7.7% for the quarter.
Medical Instruments, constituting a significant part of this broader Medical sector, is thus expected to exhibit a performance in sync with the broader Medical sector.
Recent mergers between major players in this space have paved the way for the formation of large corporations that occupy huge shares of this market. This in turn offers them with the opportunity to virtually, if not literally, exercise control by influencing product prices. Besides, innovation has always been a defining quality of this industry, leading to breakthrough products. The recent hype was the launch of tests facilitating liquid biopsy. We also believe strong product cycle and a trend among major medical instrument manufacturers to form companion diagnostic partnerships with drug makers are the major growth drivers for this subsector.
Let’s take a look at the major Medical Instruments stocks slated to release their quarterly reports this week:
Edwards Lifesciences Corp. (NYSE:EW) : This renowned transcatheter heart valve (THVs) developer is scheduled to report second-quarter 2016 earnings on Jul 26, after the closing bell. During the entire second quarter, Edwards remained in the headlines, primarily owing to the release of a handful of significant study results in favor of its THVs. Moreover, a federal jury returned a verdict in favor of Edwards’ CardiAQ mitral valve platform, awarding it damages of $70 million for trade secret misappropriation, which is expected to get reflected in the company’s second-quarter’s operating results.
(Read More: Edwards Lifesciences (EW) Q2 Earnings: Will It Be a Miss?)
EDWARDS LIFESCI Price and EPS Surprise
EDWARDS LIFESCI Price and EPS Surprise | EDWARDS LIFESCI Quote
Cynosure, Inc. (NASDAQ:CYNO) : This company manufactures and markets aesthetic treatment systems for plastic surgeons, dermatologists, and other medical practitioners. It carries a Zacks Rank #3 (Hold) and is slated to release its second-quarter financial numbers on Jul 26, before the market opens. Cynosure has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 29 cents.
Last quarter, the company posted a positive earnings surprise of 35.71%. Moreover, Cynosure’s earnings surpassed the Zacks Consensus Estimate in all of the past four quarters, with an average beat of 20.04%.
Globus Medical, inc. (NYSE:GMED) : This medical device manufacturer develops musculoskeletal implants that promote healing in patients with spine disorders. Globus Medical carries a Zacks Rank #4 (Sell) and is slated to release its second-quarter financial numbers on Jul 26, after the closing bell. The company has an Earnings ESP of 0.00%.That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 28 cents.
Last quarter, the company posted a positive earnings surprise of 3.57%. Moreover, Globus Medical’s earnings outpaced the Zacks Consensus Estimate in all of the four trailing quarters, with an average beat of 5.56%.
CYNOSURE INC-A (CYNO): Free Stock Analysis Report
EDWARDS LIFESCI (EW): Free Stock Analysis Report
GLOBUS MEDICAL (GMED): Free Stock Analysis Report
Original post
Zacks Investment Research