Earnings Miss at SurModics - Analyst Blog
May 08 2013 - 1:39PM
Zacks
SurModics Inc.’s (SRDX) second quarter fiscal
2013 (ended Mar 31, 2013) earnings (excluding special items) of 20
cents per share missed the Zacks Consensus Estimate by 2 cents. The
second quarter fiscal 2013 earnings increased 25% from the year-ago
period. The year-over-year growth was attributable to higher
revenues.
Quarter in Detail
Adjusted revenues climbed 12.3% year over year to $13.7 million.
The Zacks Consensus Estimate was $14 million. Increased sales of
vitro diagnostics offerings and hydrophilic coatings were the
primary reasons behind the year-over-year improvement.
For the reported quarter, royalties and license fees accounted for
approximately 50.8% of the total adjusted revenues with product
sales and research & development accounting for 42.0% and 7.2%,
respectively.
We note that in calendar year 2011, SurModics received a blow when
partner Johnson & Johnson (JNJ) stopped
manufacturing Cypher and Cypher Select Plus sirolimus-eluting
coronary stents on which SurModics received royalties on sales of
the product.
Following the Nov 2011 sale of the assets of its Pharmaceuticals
division to Germany’s Evonik Industries AG, SurModics started
operating through two business units – Medical Devices and In Vitro
Diagnostics.
SurModics’ adjusted revenues from the Medical Devices segment came
in at approximately $9.7 million, up 11.3%. Bulk of the segmental
revenues came from the sales of hydrophilic coatings, which surged
10% from the year-ago period.
Revenues from the In Vitro Diagnostics unit increased 15% to
$4.0 million in the second quarter of fiscal 2013. This was the
tenth consecutive quarter in which segmental product revenues
surged. The quarter saw SurModics purchasing 105,097 shares
at a cost of $2.7 million
Fiscal 2013 Projection Backed
SurModics continues to expect fiscal 2013 revenues in the range of
$55–$58 million. Earnings on a reported basis are still expected in
the range of 86 cents-99 cents per share. The Zacks Consensus
Estimate for 2013 pegs earnings at 86 cents per share on revenues
of $58 million.
SurModics currently carries a Zacks Rank #3 (Hold). Players in the
Medical Devices market, of which SurModics is a part, such as
Conceptus, Inc. (CPTS) and Bio-Rad
Laboratories, Inc. (BIO) appear to be more favorably
placed. While Conceptus carries a Zacks Rank #1 (Strong Buy),
Bio-Rad Laboratories currently possesses a Zacks Rank #2 (Buy).
BIO-RAD LABS -A (BIO): Free Stock Analysis Report
CONCEPTUS INC (CPTS): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
SURMODICS (SRDX): Free Stock Analysis Report
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