Investors slashed some 18% from Volcano (NSDQ:VOLC) shares this morning after the medical device company cut its sales outlook for 2013, blaming lower stenting procedure volumes and slower-than-expected sales of its fractional flow reserve devices in Japan.
Volcano said it now expects to post full-year sales of $391 million to $395 million, down from prior guidance of $394 million to $400 million. Third-quarter sales are forecast to reach roughly $95.8 million, missing expectations on Wall Street for Q3 sales of $97.1 million.
The news pushed VOLC shares down 18.0% to $19.97 apiece today ahead of the market’s open.
"Our business in the U.S. continued to be impacted by a decline in [percutaneous coronary intervention] volumes, although we are starting to see some stabilization in activity. In addition, while we experienced strong growth in our FFR business in Japan, revenues were not to our expectations," president & CEO Scott Huennekens said in prepared remarks.
Volcano said it expects 2014 sales to grow between 9% and 11%, or 8%-10% on a constant-currency basis.
"Our outlook for 2014 reflects several factors, including an expectation that PCIs will be down approximately 2.5% in the U.S., 2% in Japan and flat in Europe year-over-year," Huennekens said. "In addition, we are anticipating a reduction of approximately 7.5% in reimbursement for all of our disposable products in Japan, beginning in the 2nd quarter of the year."
On the bright side, Huennekens said growing sales from its pipeline of new products – including its Crux inferior vena cava filter, the Sync-Rx platform it acquired for $17.3 million last year, the Pioneer Plus re-entry catheter it bought from Medtronic (NYSE:MDT) and the Verrata FFR wire – will push sales growth into the "low-to-mid-teens" range beginning in 2015.
Volcano is slated to release its full 3rd-quarter results Nov. 4, when it plans to release its full guidance for 2013 and 2014.