CPTS Conceptus, Inc. (MM)

On May 21, 2013, we reiterated our Neutral recommendation for Wright Medical Group Inc. (WMGI) based on its first quarter 2013 earnings results and retention of sales guidance for 2013.

On Apr 30, Wright Medical announced earnings results for the reported quarter. Its loss per share of 2 cents was narrower than the Zacks Consensus Estimate of loss of 6 cents per share.

Net sales in the quarter were $120.4 million, down 5% year over year in reported terms (down 3% on a constant currency basis), missing the Zacks Consensus Estimate of $123 million.

During the reported quarter, the company’s growth in worldwide ankle and foot franchise was negated by loss of client base in OrthoRecon business in the domestic market and price decline in Japan.

The combination with BioMimetic Therapeutics will improve competitive advantage. However, dilution is expected to contribute to poor results for 2013. 

The Zacks Consensus Estimate for 2013 has gained a penny to reach a loss of 28 cents per share over the past 30 days. The Zacks Consensus Estimate for 2014 has dropped 2 cents to roost at 1 cent over the same time frame.

Our views are moderated by possible lingering effect of compliance issues and intense competition from larger orthopedic players. Despite being a niche player with a focus on extremities, the company remains exposed to volume headwind.

The stock carries a Zacks Rank #3 (Hold). We are more optimistic about Becton, Dickinson and Company (BDX) and Heartware International Inc. (HTWR) each of which carries a Zacks Rank #2 (Buy) and are expected to do well. In addition, Conceptus, Inc. (CPTS) carries a Zacks Rank #1 (Strong Buy) and warrants a look.

 
BECTON DICKINSO (BDX): Free Stock Analysis Report
 
CONCEPTUS INC (CPTS): Free Stock Analysis Report
 
HEARTWARE INTL (HTWR): Free Stock Analysis Report
 
WRIGHT MEDICAL (WMGI): Free Stock Analysis Report
 
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