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NuVasive Inc.'s (NUVA) first-quarter earnings more than doubled while the company cited glimmers of hope in a spinal-device market hurt by insurers blocking access to certain procedures.
The San Diego-based company, which previously cut 2011 guidance as insurers became more aggressive, raised its full-year view Wednesday.
Insurer push-back remains an issue, but surgeons are learning how to deal with this environment and it appears "the landscape is stabilizing," NuVasive Chief Executive Alex Lukianov said on a conference call.
NuVasive shares were recently unchanged at $30.60 after-hours after rising earlier, and following a gain of 1.9% during regular-trading hours. Shares are up 19% on the year through Wednesday's close.
Insurers have ramped up pressure on the spinal market by raising hurdles for spinal-fusion procedures for the lower back that they don't believe are well supported by medical evidence.
The spinal market could also be shaken up by Johnson & Johnson's (JNJ) planned $21.3 billion purchase of medical-device maker Synthes Inc. (SYST.VX). Lukianov said NuVasive could benefit as J&J combines its existing spinal business with the acquired Synthes business; integration in that market has proven challenging before.
"I think for us it's probably going to open up more opportunities," Lukianov said. "We see it as a positive for us."
NuVasive reported first-quarter earnings of $2.4 million, or 6 cents a share, up from $1.09 million, or 3 cents a share, a year ago. Excluding stock-based compensation and other items, the company said earnings rose to 24 cents from 21 cents.
The company also said it made an accounting change related to the economic life of fixed assets, and that this added 2 cents to per-share earnings in the recent quarter.
Sales rose 14%, in the range NuVasive had projected for the quarter. Analysts surveyed by Thomson Reuters had forecast, on average, earnings of 19 cents per share on sales of $123.2 million in the recent period.
Looking ahead, NuVasive said it now anticipates full-year earnings of 52 cents to 55 cents a share, up from its previous guidance for 39 cents to 42 cents. On an adjusted basis, the company raised its earnings view to $1.20 to $1.23 per share from $1.07 to $1.10 a share.
The company raised its full-year sales guidance by $5 million to a range of $530 million to $540 million, implying growth of 11% to 13%.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728; firstname.lastname@example.org