Avanos shares down on Q3 sales miss, shrinking profits

Shares in Avanos Medical (NYSE: AVNS), which rebranded from Halyard Health in June, have fallen over 10% today after the company posted third quarter earnings that showed profits shrinking nearly 75% and sales numbers that didn’t meet expectations on Wall Street.

The Alpharetta, Ga.-based company posted profits of $4.2 million, or 9¢ per share, on sales of $165.1 million for the three months ended September 30, seeing profits shrink 74.7% while sales grew 9.7% compared with the same period during the previous year.

Adjusted to exclude one-time items, earnings per share were 37¢, ahead of of the 26¢ consensus on Wall Street where analysts were expecting to see sales of approximately $166.7 million, which the company missed.

“We delivered a solid overall performance in the third quarter, with 10 percent top line growth and adjusted diluted EPS of $0.37, ahead of our expectations. Momentum continued in Interventional Pain and Digestive Health, while Game Ready delivered solid initial performance. Our business is well-positioned with Interventional Pain and Chronic Care growing ahead of plan for the year, while Acute Pain performance continues to be impacted by the industry-wide drug shortage and pre-fill disruption. These regulatory headwinds have lasted longer than drug suppliers and pre-fillers had anticipated, and we now expect the drug shortage to continue into 2019. Overall, we anticipate this regulatory headwind to impact this year’s total sales by approximately 3 percent, and as a result, we are lowering our full-year organic sales growth range to 2 to 3 percent. Nevertheless, we are affirming our full-year adjusted diluted EPS guidance. Looking ahead, we remain confident in our long-term outlook that we reviewed at our June analyst day,” CEO Joe Woody said in a press release.

Avanos reaffirmed its previous full-year 2018 adjusted diluted earnings per share outlook of between $1.75 and $1.90.

Shares in Avanos have fallen approximately 14.7% so far today, at $50.14 as of 12:13 p.m. EST.

In June, Avanos said that it inked a $65 million deal to acquire cold and compression therapy company CoolSystems, which markets under the name Game Ready.

The post Avanos shares down on Q3 sales miss, shrinking profits appeared first on MassDevice.

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