Somanetics 2Q Profit Down 42 Percent As Sales Slip

TROY, Mich. (AP) — Somanetics Corp. on Wednesday said its fiscal second-quarter profit fell 42 percent, as sales to hospitals fell off amid the recession.

Results missed Wall Street expectations, and the medical device maker also lowered its guidance for the fiscal year, sending shares down.

Somanetics stock fell as much as 9.8 percent early in the session, then rebounded. In afternoon, shares slipped 12 cents to $16.13.

For the three months ended May 31, the company reported net income of $1.8 million, or 14 cents per share, compared with $3.1 million, or 21 per share, in the second quarter of 2008.

Revenue slipped 7 percent to $11.8 million, from $12.7 million last year.

Analysts polled by Thomson Reuters, on average, expected profit of 13 cents per share, on revenue of $13.1 million.

President and CEO Bruce Barrett said the revenue shortfall was due to hospitals restricting capital spending more than expected because of the economic downturn. The company makes high-tech diagnostic equipment, called the INVOS Cerebral/Somatic Oximeter, to measure changes in the blood oxygen levels of patients undergoing surgery and in critical care.

"Since most of our INVOS System placements for revenue in the U.S. market are in pediatric and neonatal ICUs, capital budget constraints also are impacting the start up of new neonatal and pediatric accounts and associated sensor sales," Barrett said. Adult sensor demand was strong, he said.