AMMD Posts Prelim Sales, Reaffirms - Analyst Blog

Leading pelvic-health devices maker American Medical Systems (AMMD) has released preliminary sales data for fourth-quarter fiscal 2010. The company expects to report final results on February 15, 2011.

Revenues for the quarter edged up 0.7% year over year to $147 million, beating the Zacks Consensus Estimate of $144 million and the company's guidance of $141-$146 million. For fiscal 2010, revenues grew 4.4% to $542.3 million, also exceeding the Zacks Consensus Estimate of $539 million.

Revenue growth in the fourth quarter was impacted by an unfavorable foreign exchange translation. Excluding the currency exchange translation effect and the impact of the divested “Her Option” uterine health product line, sales grew 4%.

The Minnesota-based company stated that revenues from its Men's Health business rose 2.7% year over year in the quarter to $65.2 million. However, BPH Therapy segment revenues dipped 2.1% to $32.6 million, impacted by lower fiber sales due to the limited availability of the new BPH therapy system, MoXy Liquid Cooled Fiber.

Revenues from Women's Health business spiked 6.7% year over year to $48.8 million. Growth was led by the sustained healthy performance of pelvic floor repair products buoyed by the success of Elevate anterior and Elevate posterior systems.

The company has backed its fourth quarter and full year earnings guidance provided during the third quarter earnings call. It continues to expect adjusted earnings of 35-38 cents and $1.24-$1.27 per share for fourth quarter and fiscal 2010, respectively. The corresponding current Zacks Consensus Estimates are 36 cents and $1.25, respectively. The company will provide its fiscal 2011 outlook during the fourth quarter call.

American Medical is a world leader in manufacturing medical devices and procedures for treating health problems of both men and women. In addition to the U.S., the company sells its products in Canada, Asia, Australia, Europe and South America.

American Medical has a strong pipeline and remains focused on rolling out new products to drive growth. Other positive factors are represented by the company's dominant position in both male and female incontinence markets and a sound balance sheet.

However, American Medical faces stiff competition from larger players like Boston Scientific (BSX) and Johnson & Johnson (JNJ). Besides, the company is exposed to a significant reimbursement risk and its European markets are yet to recover from the macroeconomic headwinds. Currently, we have a Neutral rating on American Medical.

 
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