Earnings forecast for Biosensors drop by 9%

Due to its weak 3Q results.

According to Nomura, they are cut their FY13F earnings estimates by 9% to reflect the weaker-than-expected 3Q results. They also lower their FY14F and FY15F earnings estimates by 13% to reflect lower licensing revenues from Japan due to a weaker yen. 

"We lower our licensing revenue assumptions to account for the weaker yen. While contribution from Japan is expected to decline, this should be cushioned by growth from its core DES activities outside Japan, in our view," Nomura said.

Gross margins for the DES segment inched higher to 83.9% in 3QFY13F from 82.4% in 2QFY13F, reflecting better product mix and economies of scale.

The strong margins cushioned weaker licensing fees from Japan for the quarter. "We expect the core DES business to underpin growth, with the launch of BioFreedom expected to augment group performance in FY15F," it said.