Advanced Medical's Profit Falls

The first quarter misses by 4 cents.
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Advanced Medical Optics

(EYE) - Get Report

, a maker of ophthalmic surgical devices and eye care products, said its first-quarter earnings fell 81% from a year-ago period, hurt by one-time expenses.

The Santa Ana, Calif.-based, company earned $2.6 million, or 4 cents a share, in the quarter, compared with $13.83 million, or 35 cents a share, a year ago. Adjusted for items, earnings were 34 cents a share in the quarter. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 38 cents a share in the most recent quarter.

First-quarter revenue rose 23.7% from a year ago to $238.2 million as against analysts' expectation of $244.9 million. The growth in revenue is owed primarily to the May 2005 acquisition of VISX as well as growth in sales of AMO's technologically advanced products that offset lower sales in the eye care business.

In its guidance, the company expects to earn $2 to $2.15 a share for the full year, on revenue of $1.02 billion to $1.04 billion, as against analysts' estimate earnings of $2.03 a share, on revenue of $1.03 billion.

For the year 2007 the company expects to earn in excess of $2.45 a share, on revenue of $1.1 billion to $1.12 billion, as against analysts' estimate of $2.49, a share on revenue of $1.1 billion.

Cataract/implant revenue during the first quarter was up 3.2% to $120.4 million. LVC revenue was up 14.4% to $61 million while revenue from the eve care segment declined 23% to $53.8 million, hurt by negative impact of foreign currency.

Operating margins declined 937 basis points to 4.08% mainly due to business repositioning expenses and rise in selling and administrative expenses in the most recent quarter.

"AMO's strategy is to serve the full range of refractive vision care with differentiated technologies delivered through an efficient global infrastructure," the company said. "Our first-quarter results confirm that this strategy is working and allowing us to deliver sustained growth to shareholders. During the quarter, we experienced strong demand for our core brands, especially in our cataract/implant and laser vision correction businesses. We also moved closer to completing the accelerated rationalization and repositioning initiatives designed to improve our competitiveness, operating efficiency and growth potential. Finally, we delivered margin expansion that demonstrates the earnings power we're creating for AMO."

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