NuVasive 1Q Earnings Jump; Sees Signs Of Stabilization In Spinal-Device Market
May 04 2011 - 6:58PM
Dow Jones News
NuVasive Inc.'s (NUVA) first-quarter earnings more than doubled
while the company cited glimmers of hope in a spinal-device market
hurt by insurers blocking access to certain procedures.
The San Diego-based company, which previously cut 2011 guidance
as insurers became more aggressive, raised its full-year view
Wednesday.
Insurer push-back remains an issue, but surgeons are learning
how to deal with this environment and it appears "the landscape is
stabilizing," NuVasive Chief Executive Alex Lukianov said on a
conference call.
NuVasive shares were recently unchanged at $30.60 after-hours
after rising earlier, and following a gain of 1.9% during
regular-trading hours. Shares are up 19% on the year through
Wednesday's close.
Insurers have ramped up pressure on the spinal market by raising
hurdles for spinal-fusion procedures for the lower back that they
don't believe are well supported by medical evidence.
The spinal market could also be shaken up by Johnson &
Johnson's (JNJ) planned $21.3 billion purchase of medical-device
maker Synthes Inc. (SYST.VX). Lukianov said NuVasive could benefit
as J&J combines its existing spinal business with the acquired
Synthes business; integration in that market has proven challenging
before.
"I think for us it's probably going to open up more
opportunities," Lukianov said. "We see it as a positive for
us."
NuVasive reported first-quarter earnings of $2.4 million, or 6
cents a share, up from $1.09 million, or 3 cents a share, a year
ago. Excluding stock-based compensation and other items, the
company said earnings rose to 24 cents from 21 cents.
The company also said it made an accounting change related to
the economic life of fixed assets, and that this added 2 cents to
per-share earnings in the recent quarter.
Sales rose 14%, in the range NuVasive had projected for the
quarter. Analysts surveyed by Thomson Reuters had forecast, on
average, earnings of 19 cents per share on sales of $123.2 million
in the recent period.
Looking ahead, NuVasive said it now anticipates full-year
earnings of 52 cents to 55 cents a share, up from its previous
guidance for 39 cents to 42 cents. On an adjusted basis, the
company raised its earnings view to $1.20 to $1.23 per share from
$1.07 to $1.10 a share.
The company raised its full-year sales guidance by $5 million to
a range of $530 million to $540 million, implying growth of 11% to
13%.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
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