(HGR) Hanger Orthopedic Group – Consensus Earnings Estimates Rise
Hanger Orthopedic Group, Inc. (HGR) saw revenue rise year over year in 2009 and projects further growth in 2010. Hanger is trading with a forward P/E of 14.7.
Company Description
Hanger Orthopedic Group operates 677 patient care centers specializing in orthotics and prosthetics as well as distribution centers in 45 states and the District of Columbia.
The company also operates two other business units, Linkia, which provides network management for the orthotics and prosthetics industry, and Innovative Neurotronics, which provides independent research in neuromuscular technologies.
Hanger Orthopedic Beat for the Third Straight Quarter
On Feb 10, Hanger Orthopedic reported fourth quarter results which surprised on the Zacks Consensus by 2.8%. Earnings per share jumped 42.3% to 37 cents from 26 cents in the year ago period. The Zacks Consensus was calling for 36 cents.
Sales rose 10.6% to $19.6 million from the fourth quarter of 2008. The quarter was boosted by a 6.6% increase in same-center sales in the patient care centers and a 12.1% increase in distribution segment sales.
Net sales for the full year were also up 8.1% to $760.1 million from $702.1 million in 2008.
Hanger Orthopedic continues to have access to cash as it had $84.6 million of cash on hand and $63.9 million available under its revolving credit facility as of the end of Dec 2009.
2010 Outlook
Hanger is looking to capitalize on its gains from 2009 in 2010. In February, the company said it expected a 7.2% to 8.5% increase in revenue in 2010.
Earnings per share are expected in the range of $1.27 to $1.29, which would be a 12.4% to 14.2% increase over 2009.
Zacks Consensus Estimates Rise
After the fourth quarter report, analysts moved to raise estimates in line with the company’s guidance.
The 2010 Zacks Consensus rose to $1.28 from $1.21 in the last 60 days. This is exactly in the middle of the company’s guidance range.
The first quarter Zacks Consensus has fallen a penny to 16 cents in the last 60 days.
The company is scheduled to report first quarter results on Apr 26.
Value Fundamentals
Hanger Orthopedic is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of just 1.9 which is under the industry average o 2.3. Hanger also has a steady 5-year average return on equity (ROE) of 10.53%.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
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