Orthofix International shares surge on 1Q profit report
NEW YORK—Orthofix International NV shares jumped Thursday after the orthopedic products company reported better-than-expected first-quarter profit and raised its full-year outlook.
Shares rose $3.74, or 12.2 percent, to close at $34.50. The stock has traded between $28.46 and $61.66 over the last 52 weeks.
Earlier in the day, Orthofix said first-quarter profit fell 42 percent on higher costs. Still, the company's profit of 21 cents per share surged above Wall Street expectations of 9 cents per share. The company also raised its full-year profit guidance, citing anticipated cost cuts.
During the quarter, sales from spine products rose 11 percent to $62.5 million while orthopedic unit sales rose 8 percent, to $29.8 million. Sports medicine unit sales rose 10 percent to $23.3 million.
"Given these results, we now feel more confident in Orthofix's ability to meet its full year guidance," said Wachovia Capital Markets analyst Michael Matson, in a note to investors.
He said concerns over the departure of Chief Financial Officer Tim Adams will likely ease following the first-quarter report. He left the job after only five months and the company didn't provided a reason for the resignation. Former CFO Tom Hein is now filling the position on an interim basis.
Orthofix is trying to turnaround its spine business after growth slowed in the fourth-quarter, Matson said, adding that the company is in the midst of changing its business model from distributor-based sales to a mix of distributors and direct representatives.
"We think that growth should reaccelerate as new direct reps expand geographic presence and build productivity," he said. "Success with this strategy may allow Orthofix to exceed consensus estimates."
