Disappointed investors drove down the price of Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) shares today, after the pill camera developer cut its full year guidance.
Given said that the cut was due to the unstable European economy, the fact that EMEA customers reduced PillCam inventory levels which may continue in the fourth quarter, and lower healthcare utilization in the US. Given now expects 2010 full year revenue of $154-157 million. GAAP earnings per share is expected to be between $0.18 - $0.23. Non-GAAP earnings per share is expected to be between $0.51-0.58.
In the third quarter, revenue was $38.7 million, 10% higher than the $35.2 million in the third quarter of 2009. The result missed the consensus analyst estimate of $41.8 million.
Third quarter revenues include $5.9 million from Sierra Scientific Instruments (SSI) which the company acquired in April. Revenue in the quarter was lower than expected primarily due to lower sales in the EMEA region. Gross margin on a non-GAAP basis in the third quarter of 2010 was 77.3 percent, compared to gross margin of 77.8 percent in the third quarter of 2009.
On a non-GAAP basis, net profit was $3.2 million ($0.11 per share), compared to net profit of $6 million ($0.20 per share) in the corresponding quarter of 2009. The EPS figure missed analyst estimates of $0.15.
On a GAAP (generally accepted accounting principles) basis, net profit for the third quarter of 2010 was $1 million ($0.03 per share), down from $3.8 million ($0.13 per share) in the corresponding quarter of last year.
Given Imaging president and CEO Homi Shamir said, "Financial results this quarter continued to be negatively affected by the global economic slowdown. In the EMEA region, we were impacted by lower than expected PillCam sales particularly in Spain, Italy and Greece where our customers have reduced inventory levels. We anticipate this trend may continue during the fourth quarter. At the same time, we are encouraged by the fact that PillCam utilization in this region hasn't changed and we expect sales in the region to rebound in 2011."
Given Imaging's share price closed at $17.70 yesterday, giving a market cap of $526.49 million. The results were released after the close of trading, and the share fell to $16.25 in after-hours trading. On the Tel Aviv Stock Exchange (TASE) today, the share fell 8.3% by early afternoon.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2010
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