Weakened Euro Tempers Growth Expectations

An analyst at Brean Murray Carret & Co. says that recent weakness in the euro, which is used by 16 European countries, will likely prompt medical device OEMs to cut guidance for the rest of 2010. Analyst Jose Haresco says that uncertainty regarding the currency's rebound may hurt revenue and compel companies to offer conservative growth expectations.

June 9, 2010

1 Min Read
Weakened Euro Tempers Growth Expectations

In addition, Germany and the United Kingdom have already announced plans to cut spending in the next few years, and Haresco believes that device firms will be under increased pricing pressure, especially those in the spinal and orthopedic care markets.

"In some countries like the U.K., we expect to see those pressures in the fourth quarter of 2010 as the fiscal 2011 budget kicks in," he said.

Companies that earn the bulk of their revenue in the United States, such as NuVasive Inc., for which the United States accounts for about 90% of its sales, are unlikely to be affected by pricing pressures in the European Union.

Sign up for the QMED & MD+DI Daily newsletter.

You May Also Like