Device tax spurs Hill-Rom to lay off 200 | Wall Street Beat

MassDevice.com Wall Street Beat

Hill-Rom Holdings (NYSE:HRC) said it will lay off about 3% of its workforce, or roughly 200 workers, as it maneuvers to confront the medical device tax set to go into effect next year.

"The company is making these changes to help offset pressures from challenging macroeconomic conditions, regulatory and reimbursement pressures, and the new medical device tax," according to a regulatory filing.

Batesville, Ind.-based Hill-Rom also said it’s taking a $10 million to $13 million hit this year on tangible and intangible impairments, meaning a total charge of $19 million to $22 million for 2012.

Hill-Rom joins Stryker (NYSE:SYK) and Zimmer (NYSE:ZMH) in linking layoffs with the med-tech tax, a 2.3% levy on all U.S. sales of medical devices slated to begin next year. Earlier this month, Zimmer said it plans to offset the entire burden posed by the tax in 2013, in part by laying off about 170 workers. Stryker said late last year that it will cut 5% of its workforce due to the tax, and industry lobby AdvaMed has estimated that the levy will cost the med-tech sector about 11% of its jobs.

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 Funding Roundup

 Analysts’ ups and downs

  • Allergan (NYSE:AGN): Citigroup increases price target from $94 to $110, maintains "buy" rating.
  • Cardiovascular Systems (NSDQ:CSII): Benchmark Co. initiates coverage with "speculative buy" rating, $15 price target.
  • Edwards Lifesciences (NYSE:EW): JP Morgan maintains "neutral" rating; Citi maintains "buy" rating, $84 price target.
  • Insulet (NSDQ:PODD): Piper Jaffray initiates with "neutral" rating, $21 price target.
  • McKesson (NYSE:MCK): Goldman Sachs raises estimates through 2014, maintains "buy" rating.
  • Opko (NYSE:OPK): Ladenburg Thalmann maintains "buy" rating, $8.50 price target.
  • Smith & Nephew (FTSE:SN): Investec downgrades from "buy" to hold, cuts price target from £6.63 to £6.60.
  • St. Jude Medical (NYSE:STJ): Credit Suisse raises price target from $44 to $49, maintains "outperform" rating.
  • Synergetics (NSDQ:SURG): Wunderlich Securities maintains "buy" rating, $8 target price.
  • Tornier (NSDQ:TRNX): Benchmark Co. initiates coverage at "speculative buy", $31 price target.

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