Sonic Innovations (SNCI) was the Nasdaq's biggest price loser Tuesday after lowering second-quarter earnings guidance because of changes in the German health care system.
The Salt Lake City hearing-aid manufacturer expects to earn 2 to 4 cents a share in the quarter on sales of $24 million to $25 million. Analysts surveyed by Thomson First Call had been expecting earnings of 7 cents a share on sales of $27.1 million for the quarter.
According to the company, the shortfall is attributable to the implementation of a 10-euro fee for specialist doctor visits in Germany this year, and a decrease in reimbursement for hearing aids. The actions will mean that first-quarter revenue from Germany will be the company's highest this year.
"The unfortunate timing of this change just as we are reaching the critical mass that helps us generate stronger profitability magnifies the short-term effect of this issue," the company said.Sonic Innovations' stock was recently down $3.37, or 37%, to $5.80.