Cyberonics 2Q Net Down 50% On Lower Tax Benefit; View Raised

Date : 11/22/2010 @ 9:02AM
Source : Dow Jones News
Stock : (MM) (CYBX)
Quote : 69.95  0.0 (0.00%) @ 2:05AM

Cyberonics 2Q Net Down 50% On Lower Tax Benefit; View Raised

Cyberonics (NASDAQ:CYBX)
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Cyberonics Inc.'s (CYBX) fiscal second-quarter earnings fell 50% as the medical-device company was hurt by a lower tax benefit, masking higher-than-expected revenue growth and a stronger margin on price increases and higher production.

For the year, the company raised its operating income forecast by $3 million to $45 million to $48 million and lifted its revenue view to $187 million to $190 million from its increased August outlook of $184 million to $188 million.

The maker of implantable pacemakerlike devices that treat drug-resistant epilepsy has been trying to expand into depression treatment and is exploring ways for its devices to detect and potentially respond better to seizures. But it faces possible competition from the larger Medtronic Inc. (MDT) and privately held NeuroPace Inc.

For the quarter ended Oct. 29, Cyberonics reported a profit of $24.9 million, or 88 cents a share, down from $50.1 million, or $1.73 a share, a year earlier. Excluding tax benefits, earnings fell to 25 cents from 33 cents while net sales jumped to $47.5 million from $40.7 million.

Analysts polled by Thomson Reuters most recently forecast earnings of 25 cents a share on revenue of $46 million.

Operating margin rose to 26.9% from 22.3% on the price increases.

U.S. sales, the vast majority of Cyberonics's business, grew 20%. International sales were up 3%, or double that excluding currency fluctuations.

The U.S. epilepsy business saw 14% unit growth, and global epilepsy sales grew more than 15% for the 12th straight quarter.

Shares closed Friday at $27.20 and were inactive premarket. The stock is up by a third this year.

   -By Tess Stynes, Dow Jones Newswires; 212-416-2481;; 

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