From Herb Greenberg's column in the SF Chronicle:
NOW FOR THE BIZARRE
Late yesterday Santa Clara-based Visx, which makes lasers used in surgery to correct
nearsightedness, said it'll beat analyst estimates in the fourth quarter. But there's a catch: The only
reason it'll beat estimates is because it has stopped making certain royalty payments to a partnership
it formed with rival Summit Technology. Visx claimed it was only obligated to pay royalties on
procedures using the partnership's patented laser if the procedures had been approved by the Food
and Drug Administration.
Visx didn't give any further details, but said a lawsuit on the issue is pending in Santa Clara County
Superior Court.
The kicker: The company says that if it had continued making the royalty payments, its earnings
would have been below analyst expectations. Oh, and by the way, it also says its financial
performance would have been hurt by lower- than-anticipated sales to Asia (yeah, so what else is
new?) and discounts offered on trade-ins of old lasers.
The double-kicker: If the court rules that Visx has to make the payments, it also will have to pay all
of the suspended royalties. The impact would be big enough to have a ''material'' impact on the
company's ''financial condition'' and earnings.
Sounds like heads you lose, tails you lose. Company officials couldn't be reached. |
