Chicago-based Hill-Rom said profits were $22.3 million, or 33¢ per share, on sales of $632.6 million for the 3 months ended March 31, for a -14.6% bottom-line slide on sales growth of 33.2%. Adjusted to exclude 1-time items, earnings per share were 71¢, a penny ahead of expectations on Wall Street.
But analysts there were looking for sales of $651.8 million, and although Hill-Rom hiked the low end of its earnings outlook, it cut its sales guidance to $2.64 billion to $2.67 billion from $2.66 billion to $2.70 billion. Investors reacted to the miss by pushing HRC shares down -8.5% to $48.57 apiece in early-afternoon activity today.
“Driven by strong growth in North America and Welch Allyn, our pro forma constant currency revenue growth for the 1st half of the year was 3.5%,” president & CEO John Greisch said in prepared remarks. “In addition, our disciplined focus on operational execution drove strong operating margin improvement and enabled us to maintain our full-year adjusted earnings outlook despite weaker international revenues.”
Hill-Rom boosted the lower end of its earnings guidance, saying it now expects to post adjusted EPS of $3.26 to $3.30, up from prior guidance of $3.24 to $3.30. Third quarter adjusted EPS are pegged at 75¢ to 77¢ on sales of between $640 million and $650 million.
Hill-Rom paid $2.05 billion for Welch Allyn in September 2015.
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