Medical-Devices Sector Could Face Tougher Regulatory Pathway

Republicans and Democrats will debate on TV, but little may come of it.

Company Response Surpasses $2.1 Million for Immediate and Long-Term Relief Efforts

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Ingen Technologies, Inc. (IGNT), a leading manufacturer of respiratory medical devices and operating in the same industry as Stryker Corporation (SYK) and Medtronic Inc. (MDT), announced plans to quickly ramp up its revenues and generate shareholder value. Ingen Technologies, Inc. (IGNT), a leading manufacturer of respiratory medical devices, recently announced today that the CEO and Chairman [...]

Study Presented at the Combined Sections Meetings of the Triological Society, the most prestigious society in Otolaryngology, received the John J. Conley Resident Research Award

UPDATE: Edwards Life 4Q Net Up 25%; 1Q View Under Street

Edwards Lifesciences 4Q Net Rises 25%; 1Q View Under Street

• Toyota forecasts profit, may face more recalls. Toyota (TM) posted a net profit of ¥153B ($1.68B) in FQ3, and expects net income of ¥80B ($880M) in the year ending March 31, a marked improvement from earlier forecasts of a ¥200B loss. Costs and lost sales from its recalls will total $2B for the fiscal year. Toyota also said it may possibly have to recall its Prius hybrid after the Japanese government ordered an investigation of its braking system. Meanwhile, U.S. Transportation Secretary Ray LaHood testified in Congress yesterday that individuals with a recall-affected Toyota should "stop driving it," a comment he later characterized as a "misstatement." LaHood said he only meant that "if you own one of these cars, or if you’re in doubt, take it to the dealer.”
• Four more years with Bernanke. Bernanke was sworn in yesterday for another four-year term as Federal Reserve Chairman. In his swearing-in speech, he already began making the case for Fed independence, saying it "allows the Federal Open Market Committee to make monetary policy in the longer-term economic interests of the American people, rather than in the service of short-term political imperatives." Bernanke also said the bank will work to increase the amount of information it makes public.
• Borders' shares know no bounds. Shares of Borders (BGP) jumped 38% in Wednesday trading, after William Ackman, the company's largest shareholder, said bankruptcy was only a remote possibility and that the firm could even be part of an industry consolidation. Larger rival Barnes & Noble (BKS) declined to comment on the possibility of a tie-up.
• Officials outraged at AIG bonuses. Speaking before Congress, Geithner said AIG's (AIG) contracts to pay hundreds of millions of dollars in bonuses were "outrageous," and asked lawmakers to help recover the "deeply irresponsible" payments. Pay czar Kenneth Feinberg agreed with Geithner's sentiment, saying he shared the public's outrage but that the bonuses are legal because they are "old grandfathered payments."
• Treasury to hit debt limit this month. The Treasury Department expects to hit the government's $12.4T debt ceiling by the end of February, and is working with Congress to raise the limit by $1.9T. A government official said a new ceiling of $14.3T (the equivalent of around $45,000 for every American) would allow borrowing to continue into 2011.
• Monster buys HotJobs. Monster Worldwide (MWW) agreed to buy Yahoo's (YHOO) HotJobs for $225M in cash. The firms also struck a three-year deal that will see Monster provide career and job content for Yahoo's North American homepage. The sale is part of Yahoo's strategy to refocus on its core products and advertising.
• Corporate bankruptcies climb. Corporate bankruptcy filings rose 7% last month as compared to the year before, with an average of 342 businesses filing for bankruptcy every day in January. The data suggests 2010 will see more bankruptcies than 2009, even as the economy shows signs of improvement.
• Kraft crafts bond offer. Kraft (KFT) is reportedly planning to sell at least $4B in bonds in four parts today to help it finance its Cadbury (CBY) acquisition. The sale will likely include 3.25-year, 6-year and 10-year notes and 30-year bonds, and analysts expect "pretty decent demand."
• Questions raised about Medtronic wire data. Some major hospitals are reporting failure rates for Medtronic's (MDT) fracture-prone defibrillator wires that are significantly higher than the rates publicly disclosed by the company. Medtronic had pulled the devices off the market in 2007 and substituted a different wire with a lower failure rate, but around 150,000 of the original wires remain implanted in U.S. patients. In a recent report in the American Journal of Cardiology, the wires' fail rate was 9.2%, but Medtronic says its calculated fail rate of 4.6% is more reliable because it comes from a larger group of hospitals.
• Pfizer counts on explosive China growth. Pfizer (PFE) expects its business in China, where it has a 2.2% share of the highly-fragmented and rapidly-growing pharmaceuticals market, to grow at least 25% this year. Pfizer has also identified India, Russia, Turkey, Brazil and Mexico as key emerging markets, though growth is likely to be closer to the 12-14% range.
• Tax break lifts Deutsche earnings. Deutsche Bank (DB) posted a Q4 net profit this morning of €1.3B ($1.8B), beating estimates of a €660M profit and compared to a net loss of €4.8B the year before. The company's results were boosted by a tax break and strong 2009 performance in corporate and investment banking. The bank's Tier 1 ratio rose to 12.6% at the end of 2009 vs. 10.1% a year earlier, and core Tier 1 rose to 8.7% vs. 7%.
• Shell profit misses forecast. Royal Dutch Shell (RDS.A) posted a Q4 profit this morning (see details below), but fell short of analyst expectations. The company plans to cut another 1,000 employees to save at least $1B this year. "Our fourth quarter 2009 results were impacted by the weak global economy," said CEO Peter Voser. Despite higher oil prices, "gas prices and refining margins have declined sharply, because of weaker demand and high industry inventory levels. We are not assuming that there will be a quick recovery, and the outlook for 2010 is uncertain." Shares -2% premarket (7:00 ET).
• BoE holds steady, pauses QE. The Bank of England announced it will keep its key lending rate unchanged at 0.5% and will pause its £200B ($319B) asset purchase program. Both moves were expected.
• Job market shows some improvement. Monster's Employment Index (.pdf), released this morning, slipped one point in January to 114 and is down 3% Y/Y. The numbers reflect continued moderation and there's been "subtle signs of firming in hiring trends, even for sectors like finance in recent months.” According to Challenger's Job-Cut Report, released yesterday, January layoffs numbered 71,482, a 59% increase from December's nine-year low but 70% below the layoffs registered in January 2009. Yesterday's ADP Jobs report showed similar signs of moderation, with January payrolls falling 22K vs. -30K expected and -61K in December. The January employment decline was the smallest since employment began falling in Feb. 2008.

Earnings: Thursday Before Open

• Bunge (BG): Q4 EPS of -$0.21 misses by $1.04. Revenue of $10.4B (-4.6%) vs. $10.7B. (PR)
• CIGNA (CI): Q4 EPS of $1.03 beats by $0.07. Revenue of $4.6B (-3.8%) in-line. (PR)
• Entegris (ENTG): Q4 EPS of $0.12 beats by $0.06. Revenue of $146M (+29.8%) vs. $122M. (PR)
• MF Global (MF): FQ3 EPS of $0.01 misses by $0.01. (PR)
• NCR (NCR): Q4 EPS of $0.37 beats by $0.11. Revenue of $1.3B (-5.3%) vs. $1.2B. (PR)
• Spectra Energy (SE): Q4 EPS of $0.33 in-line. Revenue of $1.3B (+2.9%) vs. $1.2B. (PR)
• Starwood Hotels (HOT): Q4 EPS of $0.51 beats by $0.29. Revenue of $1.2B (+-1.2%) vs. $1.1B. (PR)

Earnings: Wednesday After Close

• Affymetrix (AFFX): Q4 EPS of $0.04 beats by $0.14. Revenue of $89M (+13%) vs. $83M. Shares +18.7% AH. (PR, earnings call transcript)
• Akamai Technologies (AKAM): Q4 EPS of $0.46 beats by $0.03. Revenue of $238M (+12%) vs. $234M. Shares -4.9% AH. (PR, earnings call transcript)
• Ameriprise Financial (AMP): Q4 EPS of $0.90 beats by $0.14. Revenue of $2.3B (+70%) vs. $2.1B. (PR)
• Assurant (AIZ): Q4 EPS of $0.86 misses by $0.15. Revenue of $2.2B (-2%) vs. $2.1B. (PR)
• AvalonBay Communities (AVB): Q4 FFO of $0.64 in-line. Rental revenue of $143.2M (-6%). (PR)
• Brightpoint (CELL): Q4 EPS of $0.22 beats by $0.06. Revenue of $906M (-6%) vs. $927M. Shares +4.75% AH. (PR)
• Broadcom (BRCM): Q4 EPS of $0.42 misses by $0.02. Revenue of $1.3B (+19%) in-line. Shares +1.75% AH. (PR, earnings call transcript)
• Cadence Design (CDNS): Q4 EPS of $0.06 beats by $0.03. Revenue of $220M (-3.1%) vs. $227M. Shares -2.9% AH. (PR)
• CB Richard Ellis Group (CBG): Q4 EPS of $0.28 beats by $0.10. Revenue of $1.3B (flat) vs. $1.2B. Shares -0.8% AH. (PR)
• CBL Associates (CBL): Q4 EPS of $0.62 beats by $0.12. Revenue of $289M (-3.4%) vs. $299M. (PR)
• Cisco Systems (CSCO): FQ2 EPS of $0.40 beats by $0.05. Revenue of $9.8B (+8%) vs. $9.4B. "We saw dramatic across the board acceleration and sequential improvement in our business in almost all areas," says CEO John Chambers. The company plans to add 2,000-3,000 to the workforce and expects Q3 sales up 23-26% - implying $10B-10.3B vs. $9.5B. (MW). Shares +1.1% AH. (PR, earnings call transcript)
• Equity Residential (EQR): Q4 FFO of $0.43 misses by $0.01. Revenue of $483M (-4%) vs. $480M. (PR)
• Fidelity National Financial (FNF): Q4 EPS of $0.30 beats by $0.08. Revenue of $1.5B (+46%) vs. $1.3B. Shares +0.07% AH. (PR)
• Kimco Realty (KIM): Q4 FFO of $0.31 beats by $0.02. Rental revenue of $212M (+8%) vs. $199M. Sees 2010 FFO of $1.07-1.15 vs. $1.15. Shares +0.9% AH. (PR)
• MEMC Electronic Materials (WFR): Q4 EPS of -$0.03 misses by $0.03. Revenue of $357M (-16%) vs. $336M. Shares -4.6% AH. (PR, earnings call transcript)
• Monster Worldwide (MWW) picks up Yahoo! HotJobs (YHOO) for $225M in cash. For that price, Yahoo will make Monster the exclusive provider of career and job content on its U.S. and Canada homepages for the next three years, with Monster paying for traffic. (PR, earnings call transcript)
• Novellus (NVLS): Q4 EPS of $0.39 beats by $0.06. Revenue of $244 (+29.5%) vs. $189M. Shares -0.3% AH. (PR, earnings call transcript)
• ON Semiconductor (ONNN): Q4 EPS of $0.19 beats by $0.05. Revenue of $497M (+1.7%) vs. $489M. Shares -0.4% AH. (PR, earnings call transcript)
• Regency Centers (REG): Q4 FFO of $0.71 beats by $0.06. Same-property net operating income -4.9%. Leasing transactions: 465 new and renewals for a total of 1.5M square feet. (PR)
• Standard Pacific (SPF): Q4 EPS of $0.31 beats by $0.33. Revenue of $340M (-9.7%) vs. $376M. Shares -3.6% AH. (PR)
• Steel Dynamics (STLD): Q4 EPS of $0.12 misses by $0.05. Revenue of $1.18B (-2.5%) vs. $1.21B. Shares -5.1% AH. (PR)
• THQ (THQI): FQ3 EPS of $0.35 misses by $0.07. Revenue of $357M (-7%) in-line. Sees Q4 EPS breaking even vs. -$0.03, on revenue of $175M-185M vs. $166M. Shares +10.8% AH. (PR, earnings call transcript)
• United Rentals (URI): Q4 EPS of -$0.21 misses by $0.01. Revenue of $557M (-30%) vs. $563M. (PR)
• Visa (V): FQ1 EPS of $1.02 beats by $0.11. Revenue of $2B (+13%) vs. $1.9B. Sees full-year net sales growth of 11-15%. Sees annual EPS growth of more than 20% through 2011. Shares +2.2% AH. (PR, earnings call transcript)
• Walter Industries (WLT): Q4 EPS of $0.62 beats by $0.03. Revenue of $236M (-35%) vs. $276M. Shares +0.5% AH. (PR)
• Yum! Brands (YUM): Q4 EPS of $0.50 beats by $0.02. Revenue of $3.4B (-2%) vs. $3.3B. Same-store sales dropped 8% in the quarter, 5% for the year: Taco Bell -5%; KFC -8%; Pizza Hut -12%. Shares -1.2% AH. (PR)

Today's Markets

• In Asia, Nikkei -0.5% to 10,356. Hang Seng -1.8% to 20,342. Shanghai -0.3% to 2,995. BSE -1.6% to 16,225.
• In Europe at midday, London -0.7%. Paris -0.7%. Frankfurt -0.5%.
• Futures: Dow -0.5%. S&P -0.6%. Nasdaq -0.6%. Crude -1% to $76.22. Gold -0.8% to $1,103.20.

Thursday's Economic Calendar

• 6:00 Monster Employment Index
  6:00 Monthly retail same-store sales
  7:00 BoE Announcement
  7:45 ECB Announcement
  8:30 Initial Jobless Claims
  8:30 Productivity and Costs
  9:00 RBC CASH Index
  10:00 Factory Orders
  10:30 EIA Natural Gas Inventory
  4:30 PM Fed Balance Sheet
  4:30 PM Money Supply
• Notable earnings before Thursday's open: AGN, AVP, BCE, BCRX, BG, BKC, CI, CINF, CLX, DO, ENTG, HOT, K, MA, MCO, MF, NCR, NOC, RAI, RDS.A, SE, SLE, TEN
• Notable earnings after Thursday's close: ALKS, ATVI, CNW, FIS, ILMN, MCHP, PBI, PKI, SUN, VRTX

Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.

Complete Story »

Haemonetics Corporation (HAE) reported third quarter fiscal 2010 earnings per share of 71 cents, missing the Zacks Consensus Estimate of 72 cents. Earnings in the year-ago quarter were 63 cents. The earnings estimate revision for Haemonetics has demonstrated a downtrend in the past 30 days. During the period, one out of twelve analysts has downgraded his [...]

(HAE) Haemonetics Corporation Misses Earnings Estimates

Haemonetics Corporation (HAE) reported third quarter fiscal 2010 earnings per share of 71 cents, missing the Zacks Consensus Estimate of 72 cents. Earnings in the year-ago quarter were 63 cents. The earnings estimate revision for Haemonetics has demonstrated a downtrend in the past 30 days. During the period, one out of twelve analysts has downgraded his ...

Haemonetics Corporation (HAE) reported third quarter fiscal 2010 earnings per share of 71 cents, missing the Zacks Consensus Estimate of 72 cents. Earnings in the year-ago quarter were 63 cents.

The earnings estimate revision for Haemonetics has demonstrated a downtrend in the past 30 days. During the period, one out of twelve analysts has downgraded his earnings estimate for the fourth quarter of fiscal 2010 and full fiscal 2010. However, there were no earnings downgrades for fiscal 2011.

Haemonetics has witnessed earnings surprises in all the preceding four quarters varying between 3.17% and 6.15%, with the four-quarter average being 4.69%. In both the first and second quarter, Haemonetics beat the Zacks Consensus Estimate by 6.15%.

Sales

Total sales in the third quarter increased 6.3% year over year to $165.2 million. Growth was registered across all major business segments.

Plasma disposables revenues increased 10.4% year over year to $59.2 million. Growth was driven by higher market growth of plasma disposables coupled with Haemonetics’ gain in market share and favorable price movements. Platelet disposables revenue increased 9.2% year over year to $39.8 million due to the company’s strong platelet distribution business in key markets.

Red Cell disposables revenues declined 7.9% year over year to $12.0 million. The decline in revenue can be attributed to lower demand for red cells in hospitals owing to a reduction in elective surgeries.  

Haemonetics’ Surgical, OrthoPAT and Diagnostics revenues increased 0.7%, 8.3% and 11.3% to $17.9 million, $9.9 million and $5.8 million, respectively. The company’s Software solutions registered a revenue growth of 9.0% year over year to $8.3 million. Equipment and other revenues declined 2.6% year over year to $12.4 million. 

On a geographic basis, the U.S. contributed 45% to total revenue and increased 2.1% year over year. International revenues increased 10.0% year over year.

Margins

Gross margin increased 130 basis points (bps) year over year to 51.7%. Non-GAAP operating margin declined 40 bps year over year to 15.6%. Non-GAAP net income increased 50 bps year over year to 11.1%. Both non-GAAP operating and net margins exclude restructuring costs associated with the company’s business transformation in fiscal 2008 and 2009.

Balance Sheet and Cash Flow

Haemonetics ended the third quarter with cash and cash equivalents of $169 million. The company had an outstanding debt of approximately $20 million at the end of the reported quarter. Haemonetics generated free cash flow of roughly $21 million in the third quarter.

Outlook

Haemonetics expects total revenues in full fiscal 2010 to grow between 8% and 9%, compared to the previous guidance of 8% to 11%. Earnings per share should range between $2.80 and $2.85, versus the previous guidance of $2.75 to $2.85. Operating income should grow in the range of 15% to 16%, compared to the prior guidance of 12% to 15%.

Haemonetics has also provided revenue guidance for fiscal 2010 in terms of its product line. Plasma disposables revenues should grow between 18% and 19% year over year. Platelet disposables revenues should grow in the range of 1% to 2%. Red Cell disposables revenues should decline by 4% to 5%. Software Solutions revenues are anticipated to grow between 9% and 13%.

Haemonetics Corporation is the market leader in developing and manufacturing blood collection and processing technology. Haemonetics operates in a very competitive environment, both for manual and automated systems, which includes big players like Baxter International Inc. (BAX), Abbott Laboratories (ABT) and Medtronic Inc. (MDT).

Read the full analyst report on "HAE"
Read the full analyst report on "BAX"
Read the full analyst report on "ABT"
Read the full analyst report on "MDT"
Zacks Investment Research

Value Expectations submits:

Every month The Applied Finance Group (AFG) surveys hundreds of professional investors to provide insight into what the group as a whole is thinking about the economy, markets and commodities in the months ahead. The Market Forecast Project (MFP) survey is a useful tool to give money managers an edge in their portfolio construction process, client communication and to stay updated on events that affect markets. In "Wisdom of Crowds", James Surowiecki theorizes that a group is often smarter than the smartest person in the group. Through the MFP, we are working to channel that wisdom to help participants understand the favorite investment ideas, macro-economic sentiment and stock market predictions of a large and diverse group of investment professionals.

One trend that has remained consistent through our last 7 surveys is that professional investors favor the Technology and Health sectors. Since investor sentiment has been consistently favorable toward these 2 sectors, we will be spending some time this week going over the companies that we find attractive within each sector.

Complete Story »

Medtronic (NYSE: MDT) closed yesterday at $43.15. So far the stock has hit a 52-week low of $24.06 and 52-week high of $46.66. Medtronic stock has been showing support around 42.37 and resistance in the 43.81 range. Technical indicators for the stock are Bearish and S&P gives MDT a positive 4 STAR (o...(Click the story link or go to http://www.marketintelligencecenter.com for the full story)

For Immediate Release

Chicago, IL – February 2, 2010 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Medical Devices Stock Review Industry, including Medtronic, Inc. (MDT), Surgical, Inc. (ISRG), Boston Scientific Corporation (BSX), St. Jude Medical Inc. (STJ) and Becton, Dickinson and Company (BDX).

A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/30011/Medical+Devices+Stock+Review+-+Feb.+2010.

We advise investors to avoid companies that have grown historically through acquisitions. These companies may find it difficult to fund acquisitions in the future. Also, they face increasing challenges in delivering operational synergies from these acquisitions, which are considered to be the prime reason for failures of Mergers & Acquisitions. Additionally, the financial statements of these companies have a large number of one-time items that affect the quality of earnings.

In our portfolio, we see growth potential in companies dealing with cardiovascular devices and surgical equipment, Neuro, blood-related and disposable products. Names in this list include Medtronic, Inc. (MDT), Surgical, Inc. (ISRG), Boston Scientific Corporation (BSX), St. Jude Medical Inc. (STJ) and Becton, Dickinson and Company (BDX). These are all producers of life-sustaining products and are less affected by economic turbulence. Among these names, Medtronic has a diversified presence in Cardiovascular, Neuro, Spinal, Diabetes, ENT, etc.

The above-mentioned names are all leaders in their respective fields and are potential winners in the long run. Although Becton, Dickinson is the only Buy-rated stock according to the Zack Rank at this time, we will closely monitor their performances in the current quarter. They are all strong candidates for upgrades.

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