Conmed (NYSE:CNMD) announced today that it is withdrawing its full-year outlook over problems implementing software at its main distribution facility.
Largo, Florida-based Conmed last month issued its guidance with a reduction from previous projections. This came on the back of an underwhelming third-quarter performance that saw its stock dip by nearly 8%. However, shares of CNMD have been on the rise since then.
CNMD shares ticked up 1.3% at $90.24 apiece in midday trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was up more than 6%.
More about Conmed pulling is 2022 guidance
In October, the company cut its now withdrawn guidance for the full year, with the high end of its EPS expectations falling particularly far. It projected adjusted EPS to fall between $3.21 and $3.28. The company previously projected a range of $3.25 to $3.45. However, the low end of its revenue guidance rose. The company said it expected $1.1 billion and $1.115 billion for the year. The high end fell from the previously touted range of between $1.095 billion and $1.140 billion.
Conmed attributed its guidance withdrawal to the implementation of new software. It designed the software to increase the efficiency and performance of its primary distribution facility. However, the implementation created shipping disruptions that lasted longer than originally expected.
The company said it is unable fully assess the impact on its fourth-quarter sales and profitability. It continues to incur costs while working to reduce the shipping backlog. Daily shipment volumes returned to normal levels, with the backlog reduced from a peak of $35 million last week to $28 million today.
Conmed believes it will ship the backlog of open orders in the coming weeks. It anticipates a limited impact to business performance in the fourth quarter.
The company issued its 2023 financial outlook. It expects revenue between $1.17 billion and $1.23 billion. Conmed projects adjusted earnings per share to range between $3.20 and $3.50 in 2023.
