Visx Down 31% On Flat Sequential Procedure
Growth
No further information is available at this time.
No further information is available at this time.
By Johanna Bennett
NEW YORK -- Shares of Visx Inc. (VISX), the nation's largest maker of lasers used in
vision-correcting surgery, fell 33% Thursday after the company reported that demand for
procedures using its surgical laser in the fourth quarter did not grow from the third
quarter.
Shares of Visx were trading Thursday morning at 30 9/16, down 14 13/16, or 32.6%,
after exchanging more than 8.5 million shares, compared with average daily volume of 3.1
million.
The hectic trading action stemmed from the company's fourth-quarter earnings report
released Wednesday evening after the market closed. Despite meeting the Street's earnings
expectations of 38 cents a share and showing increased demand for the surgical
procedures since last year, the sequential growth in the number of procedures performed
using Visx's lasers was flat, analysts said.
The news took many by surprise, launching a selling spree of Visx shares and compelling
several Wall Street analysts to lower either their ratings for the stock or cut their views.
"We have been knocked for a loop," said Banc of America Securities analyst Kurt Kruger.
Visx shares have fallen significantly over the last six weeks, starting in early December
when the Federal Trade Commission ruled that a Japanese rival, Nidek, could import its
lasers into the U.S.
Nidek, like Visx, manufactures and sells surgical lasers used to correct vision problems
such as nearsightedness. But unlike Visx, Nidek does not charge doctors a fee for each
procedure performed using its laser.
For Visx, however, those fees account for a significant portion of revenues. So a drop-off
in the number of procedures performed or a sequentially flat growth rate can play havoc
with revenue estimates.
Warburg Dillon Read analyst Emil Westergaard had predicted a 12% sequential increase
in the number of procedures performed using Visx lasers. Instead, the company's
fourth-quarter revenues of $75 million fell $7 million short of Westergaard's projection.
Still, Visx's revenue almost doubled since last year, when the company reported earnings
of 26 cents a share on revenue of $41.9 million.
A spokesperson for Visx was not immediately available for comment.
Visx shipped 94 lasers last quarter, 71 of which were placed in the U.S.
Analysts said the company blamed the lack of sequential growth in procedures on a
number of factors, including saturation at some high-volume vision correcting centers,
competition from Nidek lasers and the loss of some U.S. customers to Canadian clinics
where the operation is cheaper.
On the bright side however, the average price of laser eye surgery is falling, which will stir
consumer interest. Meanwhile, new clinics are opening and laser placements remains
strong, analyst said.
Johanna Bennett, Dow Jones Newswires; (201) 938-5240;
Johanna.Bennett@dowjones.com
Good Luck to all long VISX's shareholders! |
