Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) reported lower profits on higher revenue for the first quarter of 2012, badly missing the analysts' forecasts. The company believes, however, that it will meet its financial goals for the year, once it completes pivotal clinical trials for its Pillcam Colon 2 capsule.
Revenue rose 5% to $41.8 million for the first quarter from $40 million for the corresponding quarter. GAAP-based net profit fell to $201,000 (per share) for the first quarter from $677,000 for the corresponding quarter, and non-GAAP net profit fell to $1.8 million ($0.06 per share) from $3 million. The analysts' consensus was earnings per share of $0.13 on $48.9 million revenue.
Non-GAAP operating profit fell to $2.1 million for the first quarter from $3.9 million for the corresponding quarter. R&D expenses totaled $2.2 million in the first quarter, mainly for the PillCam Colon 2 pivotal clinical trials in the US and Japan, compared with $800,000 spent on the trial in the corresponding quarter. The clinical trial's goal is to test whether the capsule is more effective than a colonscopy in finding polyps in the colon.
First quarter sales in the Americas rose 11% to $26.7 million for the first quarter from $24.1 million for the corresponding quarter, but Europe, Middle East and Africa sales fell 3.5% to $10.8 million from $11.2 million, and Asia-Pacific sales fell 10% to $4.2 million from $4.7 million. The company expects weak sales in Japan to recover in the second quarter.
Worldwide PillCam small bowel sales rose 4% to 56,400 capsules in the first quarter from 54,200 capsules in the corresponding quarter. PillCam small bowel sales in the Americas rose 1% to 33,700 capsules, and sales in the EMEA rose 0.6% to 15,100 capsules, sales in the Asia-Pacific rose 32% to 7,700 capsules.
Worldwide sales of diagnostics products rose 28% to $12.6 million for the first quarter from $9.8 million for the corresponding quarter.
Given Imaging had $105 million in cash and cash equivalents at the end of March.
Given Imaging CFO Yuval Yanai told "Globes", "The numbers were expected. The good news is the strong growth in US sales, after falling for several quarters. We also showed strong growth in sales of the diagnostics products that we've acquired over the past three years. Diagnostics products now account for 30% of our revenue."
Given Imaging president and CEO Homi Shamir attributed the revenue growth to higher sales in North America, which offset weak sales in southern Europe and Japan. "During the quarter we continued to advance our PillCam Colon 2 pivotal clinical trials in the US and Japan and we are very pleased that the enrollment and capsule ingestion phases of these trials are complete. We are on target to conclude these trials by June," he said. "Our investment in the PillCam Colon 2 trials is reflected in our bottom line results for the quarter."
Given Imaging's share price fell 2.5% by mid-afternoon on the TASE to NIS 69.30, after rising 0.1% on Nasdaq yesterday to $18.73, giving a market cap of $575 million.
Published by Globes [online], Israel business news - www.globes-online.com - on May 9, 2012
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