CVH Coventry Health Care, Inc.

CR Bard Inc. (BCR) is set to report first-quarter 2013 results after the market closes on Tuesday, Apr 23. Let’s see how things are shaping up prior to the announcement.

In the last quarter, the medical devices maker posted a 1.80% positive earnings surprise. Despite its underperformance in the U.S. and dilution from the Neomend acquisition, the company was able to expand in the emerging markets and improve its operating margin.

Factors to Consider this Quarter

Bard is struggling to enhance its top line mainly due to sluggish sales in the U.S. market. Increasing competition and pricing/volume pressure in the U.S. economy along with the expected dilution from an expensive acquisition remain areas of concern.

Although the company is gaining traction in the emerging markets, we remain on the sidelines due to the pertinent uncertainties in the global economy. However, Bard’s well-diversified end markets as well as a vast product portfolio insulate it from fluctuations in any single therapeutic category.

Further, we wait to see how CR Bard utilizes the expected benefits from the Gore litigation lawsuit.

Earnings Whispers?

Our proven model does not conclusively show that Bard will likely beat earnings estimates this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) as well as a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks Earnings ESP:  The Most Accurate Estimate stands at $1.43, while the Zacks Consensus Estimate is also at $1.43. This comes to a difference of 0.00%.

Zacks Rank #4 (Sell): Bard carries a Zacks Rank #4 (Sell), which lowers the predictive power of ESP. This is because the Zacks Rank #4 when combined with a 0.00% ESP makes surprise prediction difficult. Moreover, we caution against stocks with Zacks Ranks of #4 and #5 (Sell rated stocks) before going into the earnings announcement, especially when the company is experiencing negative estimate revisions.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that these have the right combination of ingredients to post an earnings beat this quarter:  

Coventry Health Care Inc. (CVH), Earnings ESP of +3.80% and a Zacks Rank #2 (Buy)

Haemonetics Corporation (HAE), Earnings ESP of +2.17% and a Zacks Rank #3 (Hold)

Covidien plc (COV), Earnings ESP of +0.91% and a Zacks Rank #3 (Hold)

 
BARD C R INC (BCR): Free Stock Analysis Report
 
COVIDIEN PLC (COV): Free Stock Analysis Report
 
COVENTRY HLTHCR (CVH): Free Stock Analysis Report
 
HAEMONETICS CP (HAE): Free Stock Analysis Report
 
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