Shares in Given Imaging (Nasdaq: GIVN; TASE:GIVN), which produces the PillCam video capsule for detecting disorders in the gastrointestinal tract, fell sharply on Friday after the company pre-released its third quarter revenue figure.
Given Imaging said sales of its Given Diagnostic System and PillCam video capsule reached more than $14.5 million in the third quarter. The analysts' consensus estimate was for sales of $15.08 million. The company's share price fell 11.75% on Nasdaq on Friday to $38.90, giving a market cap of $1.06 billion. On the Tel Aviv Stock Exchange this morning, the share opened on a negative arbitrage gap of 10.77%. So far, it has fallen 9.15%, to NIS 176.80.
The third quarter sales figure represents a 50% increase over sales achieved in the third quarter of 2003. The sales total for the first nine months, $42.7 million, also represents a 50% increase over the figure for the corresponding period last year.
Commenting on the third quarter sales figure, US investment house Merrill Lynch said in a note sent to clients on Friday, "We had expected sales of $15.0 million,+55%. Sales were down $1 million sequentially from $15.5 million in Q2, which we suspect was due to seasonality. We had expected to see a summer slowdown but the impact was greater than expected.
"We would not view this revenue shortfall as any referendum on the long-term fundamentals of the company. As result of the lighter than expected revenues, we now expect Q3 EPS estimates in the $0.01-0.02 range, compared to our previous estimate of $0.02."
Merrilll Lynch maintained its "Neutral" rating for Given Imaging shares
Given Imaging is due to release its third quarter 2004 financial results after the market closes on October 28.
Published by Globes [online] - www.globes.co.il - on October 17, 2004