Smiths Acquisition Weighs On ICU Medical's Profitability, Shares Fall

ICU Medical Inc ICUI reported Q2 sales of $561 million, up 75% Y/Y, due to Smiths Medical's acquisition, and missing the consensus of $566.47 million.
Adjusted EPS fell from $1.88 to $1.37, missing the consensus of $1.86.
Guidance: ICU Medical forecasts FY22 adjusted EBITDA of $350-$370 million, down from a prior range of $450-$500 million, and adjusted EPS of $6.20 - $6.80, compared to $9.00 - $10.50 expected earlier.
Raymond James writes that while legacy ICUI continues to perform well (organic revenue growth was +6% y/y in 2Q), inflationary pressures and sluggish Smiths sales continue to weigh on profitability.
The 2022 guidance came in below estimates, as the Smiths acquisition has become a bigger struggle.
The analyst believes that the commentary around recent trends was encouraging, and the implied 4Q guidance gives some hope that '23 should be better.
The analyst has lowered the price target from $208 to $190 with an Outperform rating unchanged.
Price Action: ICUI shares are down 10.7% at $168.07 during the market session on the last check Tuesday.

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