At-home hemodialysis technology developer Outset Medical (Nasdaq:OM) reported fourth-quarter results that topped the consensus forecast.
Shares of OM, however, took a hit the morning following the company’s earnings call after the market closed yesterday. They dropped more than 12% to $25.02 apiece by midday. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was up more than 10%.
On the call, analysts raised questions about Outset’s first-quarter guidance, which Bank of America’s Travis Steed called “flat to down sequentially.” CFO Nabeel Ahmed said early signs from the first quarter demonstrate capital purchasing decisions coming off “a bit softer.” These are affecting Outset, but the company expects acceleration through the rest of the year. Ahmed attributed the softer start to the macroeconomic trends in the industry.
Outset reaffirmed its previous full-year guidance for sales between $140 million and $150 million. That marks growth between 22% and 30% compared to 2022.
The rest of Outset’s quarterly results
The San Jose, California-based company posted losses of $41.4 million. That amounts to losses of 86¢ per share on sales of $32 million for the three months ended Dec. 31, 2022.
Outset recorded a slight bottom-line slide deeper into the red on sales growth of 13.7%.
Adjusted to exclude one-time items, losses per share came in at 71¢. That registers 15¢ ahead of expectations on Wall Street. Outset also beat on revenues as analysts projected sales of $30.9 million.
Among the highlights was a 54% year-over-year increase in the year-end installed base of its Tablo home hemodialysis platform. Outset upped its total base to 4,000 systems.
“Growth in the fourth quarter exceeded our expectations as we saw Tablo’s economic and clinical advantages continue to gain traction with dialysis providers and their patients across our end markets,” said Leslie Trigg, chair and CEO of Outset. “At the same time, we continued to expand gross margins and gain operating leverage, particularly in our sales and field service organizations.”
This story originally ran on Feb. 13, 2023. Updated Feb. 14 with the next-day stock price.