Haemonetics Corp 2Q net income falls 35 percent
Medical device maker Haemonetics Corp. said Monday that its fiscal second-quarter profit fell 35 percent because of a product recall and other quality issues, even as its revenue rose.
The company lowered its profit forecast for the year, and its stock slipped.
Haemonetics said its net income for the quarter that ended Oct. 1 was $13.9 million, or 54 cents per share, compared with $21.3 million, or 85 cents per share, a year earlier.
Its revenue rose 6 percent to $179.4 million from $166.8 million.
The company said its adjusted net income was 72 cents per share. Analysts on average expected adjusted net income of 76 cents per share and revenue of $172.7 million, according to FactSet.
Shares of Haemonetics dropped $2.44, or 3.8 percent, to $61.41 by midafternoon Monday.
Haemonetics makes devices that automatically draw and process blood at donor clinics, among other uses.
CEO Brian Concannon said the costs of recalling its OrthoPat device and coping with quality issues, including problems with its HS Core Bowl device, were higher than anticipated and ate into profit.
The company now expects those costs to total about $13 million for the year, compared with its previous estimate of $9 million.
"We have determined the root cause for both products, and remediation and recovery plans are well under way," he said in a statement.
Haemonetics lowered its profit forecast for its fiscal 2012. The company now expects to earn $3 to $3.10 per share, down from its previous estimate of $3.35 to $3.45 per share. Analysts were expecting $3.40 per share on average.