Greatbatch Inc.’s second-quarter profits easily topped analyst forecasts as the manufacturer of medical devices and batteries kept a lid on costs while sales inched up by 3 percent.
Greatbatch’s profits more than doubled, to $9.8 million, or 39 cents per share, compared with $3.9 million, or 16 cents per share, a year earlier.
The company’s adjusted operating profits, which exclude expenses for items such as plant consolidation and new-product testing, grew by 19 percent, to $22.2 million, or 56 cents per share, from $18.6 million, or 43 cents per share, a year ago.
Those earnings easily topped the 46 cents per share that analysts were expecting, and Greatbatch executives said they were hiking their earnings forecast for the full year by about 4 percent to between $2.05 and $2.15 per share, up from its previous guidance of $2 to $2.05 per share. They also repeated their forecast that sales this year likely will be at the low end of their forecast range of $660 million to $680 million because of the sluggish revenues in the first quarter.
The company’s shares closed higher Thursday by 71 cents, or 1.98 percent, at $36.62.
Greatbatch executives said the improvement stemmed from a 6 percent increase in sales from its existing businesses, which excludes $4.4 million in revenues from some orthopedic product lines that the company sold at the beginning of the year.
Sales for the company’s cardiac rhythm management products, which include batteries and other components used in pacemakers and implantable cardiac defibrillators, grew by 5 percent, to $84 million, from $80 million a year ago.
Revenues from Greatbatch’s orthopedic products business slipped by 2 percent, to $32.3 million, because of the sale of the product lines.
Excluding that divestiture, orthopedic sales grew by 14 percent as the company expanded its market share and won new customers.
Greatbatch last year closed its troublesome orthopedic products factories in Switzerland and shifted those operations to plants in Tijuana, Mexico, and Fort Wayne, Ind. – a move that has made a significant impact in improving Greatbatch’s overall profitability, saving the company about $500,000 during the quarter.
Vascular product sales dipped by 2 percent, to $12.2 million, from $12.5 million, mainly because the company voluntarily recalled a pair of vascular medical devices near the end of last year that are not expected to be introduced back into the market until the second half of this year.
Sales from its commercial battery business grew by 4 percent, to $42.7 million, mainly because of a 9 percent increase in revenues from the portable medical market.