On Dec 19, 2014, we issued an updated research report on blood management solutions provider, Haemonetics Corporation (HAE). We are disappointed with Haemonetics’ second-quarter fiscal 2015 performance. However, a factor that lends optimism is the company’s expectation of profitable growth in plasma, Thrombelastograph Hemostasis Analyzer (TEG) and emerging markets through the rest of fiscal 2015.
Adjusted earnings per share of 47 cents in the reported quarter, although ahead of the Zacks Consensus Estimate by a couple of cents, were down a huge 28.8% year over year. Revenues dropped 3.5% to $227.6 million, missing the Zacks Consensus Estimate of $229 million. With the dismal performance of Blood Center disposables, the top line failed to meet our expectation. According to the company, the sluggish performance of Blood Center disposables and flat hospital disposables will continue to adversely affect Haemonetics’ business through the remaining quarters of fiscal 2015.
However, Haemonetics still considers fiscal 2015 as a transition year for the company. It expects profitable growth in plasma, Thrombelastograph Hemostasis Analyzer (TEG) and emerging market in this period, although that will possibly be offset by three major factors: unfavorable currency trend, the weak performance of the U.S blood collection market and finally, the fiscal 2014 bonus funding program that is expected to escalate the operating costs.
However, we believe, Haemonetics has significant potential to overcome its existing difficulties and achieve improved financials in the next fiscal. With the acquisition of the transfusion medicine business of Pall Corporation, Haemonetics has already made its foray into the $1.2 billion whole blood collection market.
Moreover, the company is optimistic about the acquisition of Hemerus Medical and expects successful integration of the Hemerus' SOLX collection system. The company believes SOLX will complement the portfolio of its newly added whole blood collection; filtration and processing product lines.
Haemonetics currently carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
However, investors interested in the sector may consider better-ranked stocks like ICU Medical, Inc. (ICUI), OraSure Technologies, Inc. (OSUR) and INSYS Therapeutics, Inc. (INSY). All the three stocks sport a Zacks Rank #1 (Strong Buy).
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