London-based LivaNova reported losses of -$14.8 million, or -31¢ per share, on sales of $250.8 million for the three months ended March 31. That compares with profits of $13.3 million and and amounts to sales growth of 0.2% compared with Q1 2018.
Adjusted to exclude one-time items, earnings per share were 54¢, three pennies below the consensus estimate on Wall Street, where analysts were looking for revenues of $255.9 million.
“We are disappointed by our first quarter performance in U.S. neuromodulation and Perceval sales. As a leadership team, we are implementing a series of actions to counteract the market dynamic and salesforce retention issues we experienced,” CEO Damien McDonald said in prepared remarks. “Sales results for first quarter 2019 were strong in cardiovascular across all regions, primarily driven by double-digit growth in heart-lung machines, along with strong growth in oxygenators and advanced circulatory support. Neuromodulation had another quarter of double-digit growth in Europe and rest of world. Profitability in the quarter was impacted by lower than expected sales in U.S. neuromodulation.”
LivaNova cut its outlook for the rest of the year, saying it now expects to post adjusted EPS of $3.00 to $3.10, down from $3.55 to $3.75 previously, on constant-currency sales growth of 1% to 3%, compared with prior guidance for 5% to 7%.
“We are committed to overcoming the current hurdles in U.S. neuromodulation, investing in advancing our pipeline and implementing programs to reach new patient populations around the globe. Over the past two years, we have transformed the LivaNova portfolio with the sale of our CRM business, investments in our internal R&D portfolio, including treatment-resistant depression and chronic heart failure, as well as recent acquisitions. At the same time, we have been able to expand gross margins, increase R&D to fuel our pipeline, and strengthen talent and capabilities,” McDonald said. “We believe these efforts will provide a strong foundation for LivaNova to most effectively serve the needs of our customers and patients and create quality, long-term value for our shareholders.”
LIVN shares were down -2.8% to $66.96 apiece today in mid-morning trading.