Investors failed to reward NuVasive Inc. (NSDQ:NUVA) for reporting mid-single-digit sales growth and double-digit profit growth during the 1st quarter, sending shares down slightly today on Wall Street after the medical device company lowered its full-year earnings forecast.
San Diego-based NuVasive posted profits of $851,000, or 2¢ per share, on sales of $159.5 million for the 3 months ended March 31, representing sales growth of 5.2% and bottom-line growth of 26.4% compared with Q1 2012.
Adjusted to exclude 1-time items, earnings per share reached 26¢ apiece, 4¢ ahead of expectations on The Street.
NuVasive also said it agreed to a $7.5 million settlement with spinal implant rival Medtronic (NYSE:MDT) over cervical plate patents, ensuring that the 2nd phase of the pair’s bitter legal feud will not go to trial. The $7.5 million payment will count toward any damage award levied against NuVasive in the 1st phase of the litigation, according to a press release. NuVasive also agreed to a 3% royalty rate on sales of the cervical plates covered by the Medtronic patents, according to the release.
"Since the upfront payment is fully offset against future liability and the royalty is a modest 3%, this is a very good financial arrangement for us," chairman & CEO Alex Lukianov told analysts during a conference call yesterday. "We can now focus squarely on our immediate goal of pushing forward with the appellate process in Phase I, addressing the core issues related to lateral implants and reducing the outstanding damage award."
NuVasive maintained its sales and adjusted EPS forecasts for 2013 but cut its earnings forecast from 7¢ to 2¢ apiece, prompting investors to send NUVA shares down 0.9% to $20.75 each today as of about 11:40 a.m.
