CONSHOHOCKEN, Pa. (AP) ¿ Wireless heart-monitoring device maker CardioNet Inc. fell to a loss in the third quarter, as it had ramped up marketing spending after Medicare lowered reimbursement rates on the company's products.
CardioNet said it lost $5.4 million, or 23 cents per share, company with a year-ago profit of $987,000, or 4 cents per share. Revenue grew 7 percent, to $33.3 million from $31.2 million.
However analysts were expecting a profit of 3 cents per share and revenue of $37.1 million.
Excluding restructuring charges, CardioNet said it lost $4.6 million. The company said patient volume rose 47 percent from a year ago, but that was mostly canceled out by lower Medicare payments.
On Sept. 1, Medicare administrator Highmark Medicare Service confirmed it would reduce the reimbursement rate on mobile heart technology, which includes CardioNet devices, to $754 per service. In response to the 33 percent cut, CardioNet said it needed to make new efforts to drive up sales and gain market share, as well as cut costs.
So far the company said it has eliminated $8 million in spending for 2010.
In aftermarket trading, CardioNet stock lost 46 cents, or 8.3 percent, to $5.09 from an earlier close at $5.55. Shares have traded between $5.07 and $29.50 over the last year.