NuVasive (NSDQ:NUVA) is paying dearly for a $101 million judgment against it in a patent war with Medtronic (NYSE:MDT), as Wall Street investors pare nearly 14 percent from its share price today after the release of its third-quarte earnings.
Investors pounded NuVasive Inc. today, sending share prices down nearly 14 percent as of about noon, after the spine surgery company released its Wall-Street-beating third-quarter results.
San Diego-based NuVasive posted a net loss of $67.6 million, or $1.69 per share, on sales of $132.9 million – a top-line gain of 10.5 percent but a far cry earnings-wise from the $8.5 million reported during the same period last year.
The net loss awas largely due to a $103.7 million charge for "certain intellectual property litigation expenses," according to a press release.
That would be a federal jury award of $101.2 million to Medtronic after the panel found last month that NuVasive infringed patents covering spinal implant technology. Excluding such one-time items, NuVasive posted adjusted EPS of 26 cents, beating The Street’s expectation of 23 cents.
"Our financial performance in the third quarter of 2011 attests to exceptional execution by the NuVasive team. In the face of an extremely challenging spine market, we delivered industry leading growth and executed a strategic transaction that will enhance the penetration of XLIF and NeuroVision for years to come," chairman & CEO Alex Lukianov said in prepared remarks. "[W]e will continue to remain laser-focused on pushing toward our next milestone of being a $1 billion company, with increasing profitability, to serve the needs of spine surgery patients."
NuVasive boosted its full-year sales guidance to between $538 million and $540 million, up from $530 million to $540 million, but cut its earnings forecast to reflect expected losses of $1.43 to $1.42 per share. The company had expected EPS 33 cents to 36 cents.
NUVA shares were trading at $15.35 as of about 12:15, down 13.7 percent for the day.