NxStage saw shares plummet after releasing earnings that barely squeaked by Street expectations for their 4th quarter and full fiscal year 2015.
The Lawrence, Mass.-based company reported losses of $2.8 million, or 4¢ per share, on sales of $89.8 million for the 3 months ended December 31. That amounts to a 43.7% reduction in losses for the company as sales grew 12.4% compared with the same period in 2014.
Analysts on Wall Street were looking for losses per share of 4¢, right on target with the reported losses, and revenues of $86.8 million, which the company beat.
For the year, NxStage reported losses of $14.6 million, or 24¢ per share, on sales of $336.1 million for the fiscal year ended December 31. The company saw losses for the year shrink 34.1% as its sales grew 11.5%.
The street was hoping to see losses of 23¢ per share, which the company beat, and revenue of $336.8 million, which NxStage was just under.
In response, shares dropped 14.2% to close at $15.16 today.
“It was a strong year for NxStage. We’re very pleased to again exceed our guidance on revenue, narrow our net loss and deliver a year of increasing profitability in our products business. We have a rich portfolio of current products that are expected to drive continued growth within home and critical care, our largest high growth markets, in 2016 and beyond. In addition, we continue to advance our innovative pipeline, including our next generation hemodialysis system, our new peritoneal dialysis system and our next generation critical care system. As we are beginning pilot production of our next generation hemodialysis system, we continue to align our assets and focus our execution in support of these tremendous long-term growth opportunities,” CEO Jeff Burbank said in prepared remarks.
The company released guidance for the upcoming quarter and year as well. NxStage expects to see revenue between $355 million and $360 million for the full year, with net losses between $7 million and $12 million.
For the 1st quarter, NxStage expects to see sales between $87 million and $89 million, with net losses between $2 million and $4 million.
“Our guidance for the full fiscal year 2016 includes continued strong performance from our System One segment, with expectations for annual growth within home and critical care of 15% and 9%, respectively, and a modest increase in our services segment. We’ve also guided to a much lower revenue level for our low margin in-center segment. As we continue to scale the higher margin System One segment and align our business in support of our growth opportunities, we remain on track to achieve our long-term growth and profitability targets,” CFO Matt Towse said in a press release.
Despite the dipping shares, the future could still be bright for NxStage, according to Leerink Partner analyst Danielle Antalffy. The company has delivered a series of outperforming quarters, Antalffy wrote, despite missing the street on Home Hemodialysis system sales for the year.
“But we suspect the shortfall was driven by volatility in international sales, with management historically very transparent about how the lumpy sales cycle internationally could impact quarterly performance,” Antalffy wrote in a letter to investors.
Antalffy said they were positive on the performance, and commented that any dips were not indicative of future performance.
“It’s important to note, however, that this long-term growth guidance is very back-end loaded, with upcoming product launches – a new HHD system by year-end and a highly differentiated peritoneal dialysis (PD) system by late 2017 – becoming meaningful contributors over time. Our views on the HHD adoption ramp and potential long-term upside from PD remain unchanged, and we’d be buyers on any potential share weakness today,” Antalffy wrote.