Avanos Medical (NYSE:AVNS) shares sunk today on third-quarter results that came up short of Wall Street’s projections.
The Alpharetta, Ga.–based company posted losses of -$11.5 million, or -24¢ per share, on sales of $171.4 million for the three months ended Sept. 30, sliding on last year’s $4.2 million Q3 profit on sales growth of 3.8%.
Adjusted to exclude one-time items, earnings per share were 30¢, 1¢ behind Wall Street, where analysts were looking for sales of $179.84 million.
“Our Coolief business delivered another quarter of double-digit growth; nevertheless, we were disappointed that our overall third-quarter performance fell short of our expectations,” CEO Joe Woody said in prepared remarks. “We were pleased to learn that the final CMS rules for 2020 announced last Friday makes Coolief procedures for the knee once again viable in the hospital, enabling patients suffering from osteoarthritis of the knee to continue to benefit from our leading non-opioid pain management therapy.”
Avanos said it now expects to log adjusted EPS of $1.00 to $1.10, compared to $1.15 to $1.25 previously.
“Our performance gap this quarter was due primarily to product backorders and supply chain challenges stemming from the implementation of our new IT system and an unexpected distributor inventory drawdown impacting our Chronic Care business,” added Woody. “Our teams are working hard to address the implementation challenges of our new IT system. Overall, I’m confident the steps we’re taking will enable us to address those challenges, meet customer demands, and increase shareholder value, as we continue investing for growth, prudently managing expenses, and strategically deploying capital.”
AVNS shares were down nearly -22% at $37.08 per share by the close of trading today.