Shares in Avanos Medical (NYSE: AVNS), which rebranded from Halyard Health in June, have fallen over 10% today after the company posted third quarter earnings that showed profits shrinking nearly 75% and sales numbers that didn’t meet expectations on Wall Street.
The Alpharetta, Ga.-based company posted profits of $4.2 million, or 9¢ per share, on sales of $165.1 million for the three months ended September 30, seeing profits shrink 74.7% while sales grew 9.7% compared with the same period during the previous year.
Adjusted to exclude one-time items, earnings per share were 37¢, ahead of of the 26¢ consensus on Wall Street where analysts were expecting to see sales of approximately $166.7 million, which the company missed.
“We delivered a solid overall performance in the third quarter, with 10 percent top line growth and adjusted diluted EPS of $0.37, ahead of our expectations. Momentum continued in Interventional Pain and Digestive Health, while Game Ready delivered solid initial performance. Our business is well-positioned with Interventional Pain and Chronic Care growing ahead of plan for the year, while Acute Pain performance continues to be impacted by the industry-wide drug shortage and pre-fill disruption. These regulatory headwinds have lasted longer than drug suppliers and pre-fillers had anticipated, and we now expect the drug shortage to continue into 2019. Overall, we anticipate this regulatory headwind to impact this year’s total sales by approximately 3 percent, and as a result, we are lowering our full-year organic sales growth range to 2 to 3 percent. Nevertheless, we are affirming our full-year adjusted diluted EPS guidance. Looking ahead, we remain confident in our long-term outlook that we reviewed at our June analyst day,” CEO Joe Woody said in a press release.
Avanos reaffirmed its previous full-year 2018 adjusted diluted earnings per share outlook of between $1.75 and $1.90.
Shares in Avanos have fallen approximately 14.7% so far today, at $50.14 as of 12:13 p.m. EST.
In June, Avanos said that it inked a $65 million deal to acquire cold and compression therapy company CoolSystems, which markets under the name Game Ready.