Sorin puts 2012 earthquake behind with 92% Q2 profit growth

Sorin puts 2012 earthquake behind with 92% Q2 profit growth

Sorin Group (BIT:SRN) said it’s finally put the impact of a devastating earthquake behind it, reporting surging profit growth and a return to normal operations for the Italian plant hit by the temblor.

The Italian medical device company posted profits of $18.8 million (€14.2 million) on sales of $248.9 million (€187.7 million) for the quarter, representing profit growth of 91.9% on a top-line slip of 0.3%. Adjusted to exclude 1-time items such as the earthquake, profits were down 13.4% from Q2 2012.

The temblors killed at least 27 people in May 2012. The first, rated at 6.1 on the Richter scale, struck May 20, with a pair of 5.2-magnitude aftershocks following 1st an hour later and then 11 hours after the first quake. Another 5.8-magnitude temblor hit May 29, causing widespread damage, especially to infrastructure that was already crippled during the first quake. The death toll from the second quake reached 20 people.

Although no Sorin workers were hurt, its plant in Mirandola, 1 of 2 in Italy and 7 worldwide, was damaged. The plant makes oxygenators and disposable autotransfusion kits.

"At the end of the first half of 2013, the oxygenator and autotransfusion system segments recovered from the negative impact of the earthquakes," according to a press release.

"Our 2nd-quarter revenues came in at the high end of the guidance. The cardiac surgery business unit continued to report strong and consistent revenue growth, as it recovers its market shares in the oxygenator and autotransfusion system segments. These solid results, however, were partially offset by continued challenges in cardiac rhythm management, a market still troubled by a difficult pricing environment, particularly in Europe" CEO André-Michel Ballester said in prepared remarks. "In the 2nd half of the year, we expect our CRM business to stabilize along with the market."

Sorin confirmed its outlook for the rest of 2013, saying it expects sales for its heart-and-lung machine business to beat prior guidance of roughly 10%, with a 4%-5% decline for its CRM business. Adjusted profits are expected to reach $72.9 million to $79.6 million (€55 million to €60 million), according to the release.

Third-quarter sales are expected to grow 18%-20% over Q3 2012, excluding foreign exchange impacts, "which corresponds to a full recovery from the earthquakes for oxygenators and autotransfusion systems," Sorin said.

In a separate release, Milan-based Sorin said it won 510(k) clearance from the FDA for its Connect perfusion charting system, designed to record data in real time during and after cardiac surgery.

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