Zacks_Analysts' Blog : Meridian Bullish About Fiscal 2011 - Analyst Blog

Shares of Meridian Bioscience (VIVO) got some boost as the diagnostic test kit maker released an optimistic outlook for fiscal 2011 (ending Sep 30, 2011). The company expects a rebound from a beleaguered fiscal 2010 as it was hit by a dreary influenza season, competition and a soft economy.



For fiscal 2011, Meridian envisions net sales in the range of $165 to $170 million with earnings per share expected between 77 cents and 82 cents. Net income (excluding acquisition costs) has been projected to shoot up between 15% and 20% year over year. Moreover, Meridian plans to recommend its Board to continue the current annual cash dividend rate for fiscal 2011. Shares of the Ohio-based company leapt nearly 4.7% closing at $19.03 on Sep 13.



However, Meridian expects its fiscal 2010 results to meet or come slightly below the low end its current forecasted range. Earlier, the company projected revenues of $145-$153 million and earnings of 70-80 cents per share for fiscal 2010. The tepid expectation reflects a sluggish influenza season and the company’s struggling C. difficile diagnostic business which is faced with stiff competition.



The current Zacks Consensus Estimate for revenues and earnings are $147 million and 71 cents, respectively, for fiscal 2010 and $169 million and 88 cents, respectively, for fiscal 2011.



Meridian specializes in developing diagnostic test kits for multiple serious and infectious diseases. The company acquired London-based molecular biology reagents maker Bioline for about $23.3 in July 2010. Meridian expects the acquisition to be accretive to earnings and cash flows in fiscal 2011 and spark growth through expanded product range and geographic expansion.



Meridian hopes sales in fiscal 2011 to be boosted by its diagnostic test kits for detecting bacteria like C. difficile and H. pylori and, most importantly, its first molecular test dubbed illumigene C. difficile. Meridian received approval of the U.S. Food and Drug Administration (FDA) to market illumigene in July 2010. The launch of this new test coupled with increased R&D activities is expected to spur growth in 2011 and beyond.