NxStage shares dive despite new regulatory approvals and record Q1 revenues

May 5, 2011 by MassDevice staff

NxStage Medical takes a beating on Wall Street, despite reporting record first-quarter earnings and landing regulatory approvals for its System One home hemodialysis system in Australia and New Zealand.

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Shares of NxStage Medical Inc. (NSDQ:NXTM) dove nearly 14 percent yesterday despite record first-quarter sales growth and news of regulatory approvals on the international market.

Less than two hours after the opening bell, NXTM shares had fallen nearly 13 percent and recovered only slightly before closing at $20.43.

The fall came despite the Lawrence, Mass.-based company beating Wall Street's Q1 revenues estimates of $49.0 million by more than $1.5 million. Net losses of 11 cents per share were in the middle of analysts' prediction of 10 to 13 cents per share.

NxStage reported losses of $6.0 million on sales of $50.6 million during the three months ended March 31. That compares with net earnings of $9.0 million, or 19 cents per diluted share, on sales of $40.4 million during the same period last year.

The top-line boost was attributed to sales of the in-home version of the company's System One hemodialysis system, which increased almost 37 percent from $19.0 million in 2010 to $26.0 million in 2011, and the Total System One, which had a sales increase of more than 33 percent from $25.1 million to $33.5 million.

In a note to investors, Leerink Swann analyst Danielle Antalffy wrote that home system sales were basically in line with her firm's expectations.

"Management reiterated 2011 sales guidance of $205 million - $213 million, vs. [Leerink] at $210.6 million and the Street at $210.5 million, which likely reflects no meaningful increase to the company's current $1.2 million - $1.6 million sequential home sales growth guidance," Antalffy wrote.

"Still, this is a historically conservative management team and ... we're inclined to think the company is taking a cautious stance for now and 2011 guidance could ultimately prove too low," she added

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