SurModics Profits Fall

The health care diagnostic misses estimates by a nickel a share.
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(SRDX) - Get Report

said after the market close Wednesday that its profits missed estimates and fell year over year, but gained sequentially, in the fiscal third quarter ended June 30.

The Eden Prairie, Minn., company, which provides drug-delivery technologies, reported earnings of $5.6 million, or 31 cents a share, compared to $6.3 million, or 34 cents a share, in the year-ago quarter. It landed shy of the Thomson Financial consensus target of 36 cents a share.

Operating income was $7.5 million, a 21% decrease from $9.5 million in the comparable 2006 period. The company's revenue for the quarter decreased 2% to $17.8 million from $18.1 million in the year-ago quarter.

SurModics said revenue not related to its cypher stent increased 19% year over year and 11% sequentially. Hydrophilic revenue increased 25% and in vitro revenue increased 28%, while revenue related to drug delivery decreased 33% year over year.

"While drug-eluting stent-related revenue declined, we are pleased with the results generated in the rest of our diversified business portfolio," said CEO Bruce Barclay. "In fact, despite J&J's 14% sequential decrease in drug-eluting stent sales compared with the March quarter, total revenue for SurModics actually increased 2% sequentially."

The company completed a $35 million share buyback, reducing shares outstanding by 5%. The stock was 1.5% lower in premarket trading Thursday at $46.