Robotic cardiac surgical systems maker Stereotaxis, Inc. (NSDQ:STXS) watched its share price plunge hard and fast as it suspended 2011 guidance on a weak second quarter earnings report.
Shares sank 58 percent from Monday’s close of $2.85 to $1.19 at the end of the day yesterday, inching toward the company’s 52-week low of $1.11.
Sales for the three months ended June 30 dropped 23 percent to $11.6 million, compared to $15 million during the same period last year. Losses more than doubled for the quarter to $9.7 million, or a loss of 18 cents per share, compared with losses of $3.9 million, or 8 cents lost per share, in Q2 2010.
Citing "corporate developments and an uncertain business environment," St. Louis-based Stereotaxis withdrew its previous financial guidance and temporarily suspended providing guidance for this year "until there is more predictability to the company’s magnetic platform business."
"Our revenue and new capital order performance is being impacted by a slowdown in Niobe II momentum and the related impact on the Odyssey business due to delays of Odyssey installations in Niobe labs," president & CEO Michael Kaminski said in the report. "We are committed to taking the necessary actions to improve our operating performance, enhance our competitive position and strengthen the business for the long term."
Stereotaxis plans to reduce operating expenses by 15 to 20 percent to minimize cash burn while continuing to fund research and development. It is also exploring options to raise cash without hurting shareholder value. Stereotaxis expects its efforts to come through in Q4.
"We need to take difficult but prudent actions to significantly reduce our costs as the market awaits the availability of Epoch, and we are immediately implementing overhead cost-reduction initiatives that will significantly realign and reduce operating expenses and minimize cash burn, while maintaining R&D investments to fund high growth opportunities like the continued advancement of our robotic technology platform," Kaminski said.
STXS stock has managed to avoid sinking further today, with shares trading around $1.20 mid-morning.
Meanwhile, company CFO Dan Johnston resigned from his post, effective August 15, to pursue other professional interests. He will remain on as a consultant until the end of the year.
