Medical Instrument Stock Earnings On Nov 2: HOLX, MASI & More

We are in the middle of the third-quarter earnings season with 291 S&P 500 members (58.2% of the total index) having released their quarterly numbers, as of Oct 28. After five consecutive quarters of earnings declines for the S&P 500 index, the quarterly reports so far have restored expectations of a reversal in the quarter.

Total earnings have grown 2.2% year over year for the S&P 500 members on a beat ratio of 73.5%. Revenue growth stands at 1.3% with 57.4% beating revenue expectations.

With a significant number of earnings reports yet to be released, this week is going to prove crucial for the Q3 cycle.

As per the latest Earnings Preview, Medical is one of the 12 broader sectors among the 16 Zacks sectors which is expected to report earnings growth. The sector is likely to see 6% earnings growth on 7.3% higher revenues in the quarter.

What’s in Store for the Med-Instrument Space?

Medical Instrument is an essential part of the broader Medical sector which holds a lot of promise at this moment. According to a survey by KPMG, medical device companies plan to spend more than 6% of revenues on R&D/innovation, which is way above the R&D investments made by other manufacturing companies. The innovation and breakthroughs can come in the form of new products or surgical techniques or cost-effective products targeting the emerging markets.

Let’s take a look at the major medical instrument stocks slated to release their quarterly numbers on Nov 2:

Hologic Inc. (NASDAQ:HOLX) : Headquartered in Bedford, MA, Hologic develops, manufactures, and supplies diagnostics, medical imaging systems and surgical products which cater to the healthcare needs of women. The company is focused on mammography systems for breast examination and osteoporosis assessment.

Hologic, slated to report fourth-quarter fiscal 2016 results, currently carries a Zacks Rank #2 (Buy) and an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and Zacks Consensus Estimate stand at 50 cents. As per our model, a stock needs to have both a positive earnings ESP and a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) to beat earnings. Thus, we cannot conclusively predict a beat for this company. (read more: Is a Surprise in Store for Hologic in Q4 Earnings?)

Masimo Corporation (NASDAQ:MASI) : Irvine, CA-based Masimo develops, manufactures and markets a group of non-invasive monitoring systems. The company’s flagship product – Signal Extraction (SET) Pulse Oximetry – is used to monitor blood oxygen saturation levels and protect against hypoxemia and hyperoxemia. The device also measures pulse rate.

We cannot conclusively predict an earnings beat for Masimo as it carries a Zacks Rank #3 and an earnings ESP of 0.00%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.

Steris Plc (NYSE:STE) : Headquartered in Ohio, Steris develops, manufactures and markets infection prevention, decontamination, microbial reduction, and surgical and gastrointestinal support products and services. The company was originally known as STERIS Corporation.

Our proven model does not conclusively show an earnings beat for the company. Steris currently has a Zacks Rank #4 (Sell) and an earnings ESP of 0.00%. Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Wright Medical Group N.V. (NASDAQ:WMGI) : Based in Amsterdam, Netherlands, Wright Medical Group is an orthopaedics medical device company specializing in extremities and biologics products.

However, our proven model does not conclusively show an earnings beat for the company. Wright Medical currently sports a Zacks Rank #1 and an earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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