CHICAGO, Aug. 9, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: SurModics Inc. (SRDX - Analyst Report), Johnson & Johnson (JNJ - Analyst Report), Abbott Labs (ABT - Analyst Report), Medtronic Inc. (MDT - Analyst Report) and Boston Scientific Corporation (BSX - Analyst Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Wednesday's Analyst Blog:
SurModics Tops, Lifts View
SurModics Inc.'s (SRDX - Analyst Report) third quarter fiscal 2011 earnings (excluding special items) of $0.13 per share beat the Zacks Consensus Estimate by $0.09 and the year-ago adjusted earnings by $0.02. The impressive year over year performance was primarily attributable to lower operating expenses.
Revenues on an adjusted basis dropped approximately 3.4% year over year to $17.9 million in the reported quarter. Revenues surpassed the Zacks Consensus Estimate of $17 million. On a sequential basis adjusted revenues increased 2.9%.
In October 2010, SurModics made certain changes to its organizational structure to reduce costs and utilize its resources more efficiently. Following the restructuring, the company now operates through three business units: Medical Devices, Pharmaceuticals and In Vitro Diagnostics.
SurModics' reported revenues from the Medical Devices segment came at $9.6 million, down 18% year over year. Pharmaceuticals division climbed 34% from the prior year quarter to $5.0 million. Reported revenues from the In Vitro Diagnostics unit jumped 7.1% year over year to $3.4 million.
For the reported quarter, royalties and license fees accounted for approximately 41.8% of total reported revenues with product sales and research & development accounting for 32.5% and 25.7% respectively.
SurModics noted that royalties from the sales of Cypher stent (reflecting revenues from the Medical Device unit), which is marketed by the Cordis division of Johnson & Johnson (JNJ - Analyst Report), have been on the decline due to the reduced sales of the product. According to Johnson & Johnson, global sales of Cypher during the most recent quarter were down 61% year over year. Royalty received by SurModics pertaining to the Johnson & Johnson drug delivery license decreased 13% sequentially.
We remind investors that in June 2011, Johnson & Johnson announced that it will stop manufacturing Cypher and Cypher Select Plus sirolimus-eluting coronary stents by year end. We note that sales of the product are declining due to increased competition from big players like Abbott Labs (ABT - Analyst Report), Medtronic Inc. (MDT - Analyst Report) and Boston Scientific Corporation (BSX - Analyst Report).
SurModics exited the quarter with $63.2 million in cash and investments but no debt. All 5 new licensees, who signed with SurModics during the quarter, were in the Medical Devices unit. Moreover, the quarter saw the launch of 2 new customer product classes.
Fiscal 2011 Outlook
Apart from releasing financial results, SurModics raised the guidance for fiscal 2011. SurModics expects to end fiscal 2011 with revenues in the range of $65 million-$68 million (old guidance: $63 million- $65 million). Adjusted earnings per share for fiscal 2011 are projected in the range of $0.28- $0.38 (old guidance: $0.13-$0.26).
Our Recommendation
We have a long-term Neutral recommendation on the stock. SurModics carries a Zacks #4 Rank (Sell rating) in the short run.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
SOURCE Zacks Investment Research, Inc.
Share this article