Conmed lowers outlook as hospitals tighten budgets
UTICA, N.Y. --Surgical equipment maker Conmed Corp. said Monday a stronger U.S. dollar cutting into overseas business and less spending by budget-tightening hospitals will hurt capital equipment sales -- resulting in lower-than-expected fourth-quarter profit.
The weak economy will continue to hurt result into 2009, the company said.
Conmed now expects fourth-quarter profit excluding one-time items between 28 cents and 33 cents per share on sales of $176 million to $178 million. The new guidance marks a turnaround from several months ago, when the company said its outlook for capital equipment sales looked strong.
In October, Conmed estimated fourth-quarter profit between 42 cents and 46 cents per share on sales of $192 million to $197 million. Analysts polled by Thomson Reuters have forecasts earnings of 43 cents per share on revenue of $195.6 million, on average.
In past quarters, medical-device makers received a boost from overseas sales because of a positive foreign-exchange rate. Now, a stronger dollar is reducing that benefit. Meanwhile, hospitals are spending less on equipment in the economic downturn, affecting companies like Conmed.
"While Conmed has been adversely affected by the rapid economic changes, we remain committed to our long-term goals of increased profitability through the introduction of new products and increased efficiencies throughout the organization," said President and Chief Executive Eugene R. Corasanti, in a statement.
For fiscal 2008, the company now expects profit of $1.48 to $1.53 per share on revenue between $739 million and $741 million. Analysts have estimated full-year profit of $1.63 per share on revenue of $758.5 million.
In 2009, the company expects further profit reductions because of the weak economy, setting guidance between $1.15 and $1.25 per share -- well below Wall Street's average $1.78-per-share forecast.
Conmed is scheduled to report its 2008 results Feb. 5. 