Record sales of Greatbatch Inc.'s implantable medical components, coupled with sold growth in sales of its commercial batteries, helped the Clarence-based company boost its first-quarter profits by 60 percent.
The improved earnings easily topped analyst forecasts and the company said it expects profits this year to grow about 10 percent faster than it predicted in February and more rapidly than analysts were expecting.
Greatbatch's profits jumped to $10.7 million, or 43 cents per share, including an 11-cent per share gain from an exchange of some of its debt and expenses related to its upcoming shutdown of plants in Columbia, Md., and Carson City, Nev.
Excluding that gain and other restructuring expenses, Greatbatch earned 36 cents per share, topping the 30 cents per share that analysts had been expecting.
"We had a solid start to the year," said Thomas J. Hook, Greatbatch's chief executive officer.
The company also said it expects the rest of the year to be better than first expected, hiking its earnings forecast to between $1.41 and $1.48 per share, excluding the gain from the debt exchange and the plant closing costs, up from the $1.35 that analysts surveyed by Thomson Financial/First Call were expecting.
Including the restructuring costs, Greatbatch said it expects to earn $1.40 to $1.46 per share, up from 73 cents per share in 2006.
Greatbatch's sales rose by 13 percent to $76.9 million, buoyed by a more than doubling of the company's revenues from capacitors used in implantable cardiac defibrillators, which soared to $8.5 million. Hook attributed the increase to customers replenishing their inventories, as well as a surge in orders from one customer, which analysts believe to be Boston Scientific.
Greatbatch's sales of feed-throughs, which carry voltage to implantable medical devices, grew by 13 percent to $18.4 million. The company attributed that growth to greater market penetration, while revenues from other medical components, including assembly products and coated electrodes, grew by 17 percent to $15.1 million.
Those gains were offset by relatively flat demand for pacemaker batteries, which increased sales by 1 percent, and a 10 percent drop in sales of the enclosures that Greatbatch makes.
The company's commercial power supply business grew by 11 percent to $11.7 million, fueled by strong demand from the oil and gas, pipeline and military markets, Hook said.