Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



1 Must Watch Trend in Medical Devices

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Earnings season is in full swing, offering investors an awesome opportunity for an update on portfolio companies and their competitors. While press releases are chock-full of numbers and details, the carefully worded statements around business trends often leave investors wanting more. That's where earnings calls come in. Though they're also subject to the limitations of canned management speeches, the session of questions and answers at the conclusion of each call can help investors scratch the surface of what's really going on.

This week has been a busy one for the medical technology business, with a variety of large players in the industry reporting results. One area of common ground was macroeconomic weakness -- particularly in Europe -- and its impact on procedural growth and, ultimately, revenue. Below, I walk through some notable earnings call quotes from each company around international business trends, with an emphasis on Europe.

Intuitive Surgical (Nasdaq: ISRG  )

  • "....procedure growth was challenged by a continuing weakness in Europe."
  • "...we expect economic pressure in Europe to persist for the near future."
  • "Total procedure growth quarter -- year-over-year was 22%. And then what we said was that the procedure growth outside of the U.S. year-over-year was 9%."

Johnson & Johnson (NYSE: JNJ  )

  • On the knee replacement market: "Competitive pressures and the softer market affected growth in Europe"
  • "In Europe, we do see, in the MD&D [Medical Devices & Diagnostics] businesses, some volume pressures, particularly in Greece, Spain, Portugal and early signs also in Italy.
  • "...the Europe business for Johnson & Johnson, we reported 7% operational growth...within the MD&D business, excluding Synthes, it marginally declined in the quarter, but only slightly. So we are seeing some pressure as we expected to see early in the year in the procedural volumes in Europe as well."

Stryker  (NYSE: SYK  )

  • "So we really have a challenge in Europe that we have to address. We normally see September as a month where the sales will pick up. Even in Medical here in the U.S., we didn't see the kind of pickup we were anticipating. And certainly, in Europe, the normal pickup that we would have, that we had factored into our projections did not materialize."

St. Jude Medical (NYSE: STJ  )

  • "We experienced a negative impact this quarter from European austerity measures, which includes an overall slowdown in cardiovascular procedures in Europe."
  • "The best way to characterize our information and our observations here at this point is to say that our markets just generally seemed sluggish."

Boston Scientific (NYSE: BSX  )

  • "We believe the risks of increasing macroeconomic weakness, particularly in Europe, and softening procedural volumes are real."
  • "So, if you look at the midpoint of our guidance from a CRM [Cardiac Rhythm Management] perspective globally, it's down about 5% year-over-year. That's more or less what we're calling the market."

As you can see from the quotes above, the international environment, particularly in Europe, will be a key area to watch for medical devices companies. By paying attention to earnings calls, and learning more about the nuances of a particular industry, investors can make more informed investment decisions going forward. In this case, it would be a safe bet to expect fellow cardiac device player Medtronic (NYSE: MDT  ) , and robotic surgery company MAKO Surgical (Nasdaq: MAKO  ) , to have faced some of these same headwinds when they report earnings next month.

Foolish Bottom Line

The recent market sell-off of MAKO Surgical shares has many wondering whether the potential growth prospects of the robotic surgery company make this stock a buy or a stock to stay away from. To answer this question, analyst and MAKO expert David Meier has authored a premium research report covering all of the must-know details on the company, including key areas to watch, and risks looming in the future. As an added bonus, David will keep you informed with a full year of updates and guidance on MAKO Surgical as news breaks. Click here now to learn more and start reading. .

Brenton Flynn has no positions in the stocks mentioned above. The Motley Fool owns shares of Intuitive Surgical, Johnson & Johnson, MAKO Surgical, Medtronic, and St. Jude Medical. Motley Fool newsletter services recommend Intuitive Surgical, Johnson & Johnson, and MAKO Surgical . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 21, 2012, at 11:54 PM, anthonyms wrote:

    I'm not sure MAKO will be affected or be able to claim to be affected by "Europe". It has hardly any sales outside North America, (1 installation in UK and a couple in Asia). In fact if the US market was still strong for others then MAKO might actually deliver surprisingly good results. Medtronic of course is exposed to Europe.


  • Report this Comment On October 22, 2012, at 12:04 AM, ravens9111 wrote:

    Add EW to the list.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2067041, ~/Articles/ArticleHandler.aspx, 10/25/2016 5:06:59 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:01 PM
BSX $22.44 Down -0.53 -2.31%
Boston Scientific CAPS Rating: ***
ISRG $679.50 Down -5.50 -0.80%
Intuitive Surgical CAPS Rating: ****
JNJ $113.96 Up +0.35 +0.31%
Johnson and Johnso… CAPS Rating: ****
MAKO.DL $0.00 Down +0.00 +0.00%
MAKO Surgical CAPS Rating: ****
MDT $82.47 Down -0.83 -1.00%
Medtronic CAPS Rating: *****
STJ $79.01 Down -0.41 -0.52%
St. Jude Medical CAPS Rating: **
SYK $113.19 Down -1.54 -1.34%
Stryker CAPS Rating: *****