Greatbatch Inc.'s first-quarter profits more than doubled as the Clarence battery and medical device maker's sales jumped by 13 percent.
While Greatbatch's main cardiac rhythm management business, which accounts for more than half of the company's total sales, had only modest sales growth, its vascular access, orthopedic and commercial battery products all posted revenue growth rates of 19 percent or better.
Greatbatch executives said the improved sales and earnings reflect its push during the last three years to diversify into other medical products markets and broaden its product offerings to include more complete medical devices.
"During the quarter, we began to see the first revenues from this strategy," said Thomas J. Hook, Greatbatch's president and chief operating officer, adding that the more complete devices are expected to yield more profitable sales.
Greatbatch's profits jumped to $11.9 million, or 51 cents per share, from $5.5 million, or 24 cents per share, a year ago. About half of the gain, or 13 cents per share, came from the sale of an investment.
Still, Greatbatch's operations improved markedly. Its adjusted operating profits grew by 25 percent.
The company's sales rose to a record $149 million from $132 million a year ago, fueled by a 34 percent jump in orthopedic product sales and a 28 percent increase in vascular access revenues.
"We are off to a solid start for 2011," said Thomas J. Mazza, Greatbatch's senior vice president and chief financial officer.
Mazza said he is "cautiously optimistic" about the company's prospects for the rest of the year, despite continued pricing pressure from customers. "As we all know, one quarter does not make a year," he said.
Still, Mazza said the company expects its earnings this year to be toward the high end of its previous guidance, which predicted that profits would rise to between $1.55 per share and $1.65 per share, up from $1.51 per share last year.