UPDATE 1-Guidant Q1 net jumps, shares slump
Thursday April 13, 1:04 pm Eastern Time
INDIANAPOLIS, Ind., April 13 (Reuters) - Cardiovascular device maker Guidant Corp. (NYSE:GDT - news) on Thursday reported record profits and revenues in the first quarter, but its stock price weakened as analysts fretted over the company's sales growth.
Guidant shares were down 9-1/16 at 55-15/16 at 12:01 p.m. CDT (1701 GMT), extending earlier losses made after the results were released.
The Indianapolis-based company said profits rose 21 percent to 32 cents per share excluding special charges, matching Wall Street's forecasts, fuelled by strong sales of its new dual chamber implantable pacemaker/defibrillators.
Net income totalled $118.8 million, or 38 cents per share, up from $98.3 million, or 32 cents per share, exclusive of charges in the year-ago quarter.
Revenue rose 6 percent to a record $630.7 million from $596.4 million in the first quarter of 1999.
Still, sales were not high enough to satisfy Wall Street.
``The top line was about $5 million to $10 million lighter than expectations,' said ABN AMRO industry analyst Girish Tyagi.
Guidant, the world's top manufacturer of stents, or small wire mesh devices used to prop open arteries, said its industry leadership was strengthened with the full U.S. launch of the company's newest stent line, the Multi-link Tristar coronary stent system.
``I think people assumed we'd see the full impact in the first quarter of new product, but it takes time to launch a product in a meaningful way. I think those assumptions were misplaced,' Tyagi said.
Gruntal analyst John Putnam said he was disappointed with Guidant's stent sales, but improved sales of implantable cardioverter defibrillators seemed to have offset the blow.
``All and all, it was really a mixed bag,' he said.
In a statement, Guidant President and Chief Executive Ronald Dollens said, ``The full U.S. launch of the Ventak Prizm dual
chamber implantable pacemaker/defibrillator in February allowed Guidant to regain its traditional U.S. market leadership position exiting the quarter in this important product category and led Guidant's top line growth.'
Prizm was launched in the second month of the quarter and did not reach full distribution until March. It fuelled U.S. implantable defibrillator sales growth of 19 percent versus the first quarter of 1999 and 21 percent over the fourth quarter of last year, the company said. |
