Wright Medical shares tumble on Q3 sales miss, growing losses

Shares in Wright Medical (NSDQ:WMGI) fell today after the medical device maker missed sales expectations on Wall Street with its 3rd quarter earnings results.

The Netherlands-based company posted losses of $131.9 million, or $1.26 per share, on sales of $170.5 million for the 3 months ended September 30, seeing losses grow 19.7% while sales grew a smaller 8.4% compared with the same period last year.

Adjusted to exclude 1-time items, losses per share were 16¢, just ahead of the 17¢ consensus on Wall Street, where analysts expected to see revenue of $173.6 million.

“Our U.S. upper extremities business had an exceptional quarter and grew 19%. However, in total, the third quarter fell short of our expectations. The third quarter was negatively impacted by the hurricanes. In addition, our U.S. lower extremities business did not Perform as we expected as the benefit from the sales force additions is developing slower than we originally anticipated. We have adjusted our net sales guidance accordingly. Despite this impact, we made positive progress on non-GAAP adjusted EBITDA margins, which improved approximately 370 basis points over prior year. Highlights in the quarter included 19% sales growth in U.S. shoulders, led by the ongoing launch of our Perform Reversed glenoid, which is on a strong growth trajectory, and continued contributions from our Simpliciti shoulder system. We anticipate that our Perform Reversed launch and accelerating adoption of Blueprint enabling technology will drive strong shoulder revenue growth for the remainder of the year and beyond as additional instrument sets are delivered to the U.S. field. In U.S. lower extremities, our technologically advanced products, which include Augment Bone Graft, Salvation Limb Salvage and Total Ankle Replacement continued to Perform well, growing 16% or about twice the overall market growth rate in the quarter. Growth in the core U.S. lower extremities and core biologics portfolio was significantly lower than our more technologically advanced products due to slower than anticipated benefit from the sales rep additions that we made earlier in the year. We expect to see improvement in the fourth quarter and beyond as the larger footprint, new products and new reps expanding relationships begin to take effect,” prez & CEO Robert Palmisano said in a prepared statement.

The company updated its previous sales guidance for the remaining year, lowering its sales expectations from between $755 and $765 million to between $740 and $745 million.

Wright also adjusted its earnings per share expectations, moving from expected losses of between 28¢ and 24¢ per diluted share to expected losses of between 33¢ and 26¢ per diluted share.

Shares in Wright closed down 7.3% today at $24.05.

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