GIVN Given Imaging Ltd. - Ordinary Shares (MM)

AngioDynamics Inc. (ANGO), a provider of therapeutic and diagnostic devices for the treatment of peripheral vascular and other non-coronary diseases, has released its preliminary financial results for the third quarter of fiscal 2013. The company will report its full results on Apr 9, 2013.

AngioDynamics expects to generate total sales of $82 million in the third fiscal quarter. This is significantly lower than the company’s previously announced guidance of $89–$90 million. Additionally, average daily sales of most products remained flat sequentially.

Management believes that softer sales in the Vascular Access franchise, delayed capital equipment sales in the Oncology/Surgery business coupled with weak procedure volume in the Peripheral Vascular unit led to the decline in revenues. Particularly, procedure volumes for AngioDynamics' Cardiology and VenaCure EVLT offerings were below expectations.

As a result of softness in elective procedures and persisting austerity measures in the market, AngioDynamics expects adjusted net income in the range of 4 cents–6 cents per share. The current Zacks Consensus Estimates for revenues and earnings per share for the third quarter of fiscal 2013 are $88 million and 8 cents, respectively.

However, management believes that the unexpected lower sales were a temporary impediment and the company is on track to achieve its financial goals going forward. AngioDynamics successfully acquired Mircosulis, a developer of minimally invasive microwave ablation technology for the coagulation of soft tissues. In addition, AngioDynamics effectuated a sole-sourced IDN agreement worth more than $2 million annually and completed training its sales force.

On a positive note, management affirmed its earlier target of $1 million AngioVac sales in fiscal 2013. The company shifted PICC (peripherally inserted central catheter) accounts to the Bioflo technology in the quarter, which now comprises 10% of total PICC revenues and generates $500,000 of AngioVac sales.

The company currently carries a Zacks Rank #3 (Hold). While we prefer to remain on the sidelines on AngioDyanmics, other medical stocks such as Given Imaging Ltd. (GIVN), Nuvasive Inc. (NUVA) and Cyberonics (CYBX) with a Zacks Rank #1 (Strong Buy) are worth considering.
 

 
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