TheStreet's Rhonda Schaffler discusses why Endo's stock is tumbling today.
NEW YORK (TheStreet) -- Shares of Endo International (ENDP) - Get Report are plunging 20.83% to $41.91 on heavy trading volume in afternoon trading on Monday after the company said it will close its Astora Women's Health division by the end of March after failing to find a buyer.
The Dublin-based specialty healthcare company said the closure is to reduce future product liability concerns. The segment has been facing lawsuits related to its vaginal mesh products in recent years, the Wall Street Journal noted.
Endo and other medical manufacturers have been dealt lawsuits after injuries connected to the inserts prompted safety concerns, the Journal added. Vaginal mesh products treat pelvic organ prolapse and urinary incontinence.
"Endo will conduct a wind down process and work efficiently to support physicians in transitioning to alternative products," the company said in a statement this morning.
Additionally, the company reported its 2015 fourth quarter results before today's market open.
The drug maker posted adjusted earnings of $1.36 per diluted share, beating analysts' expectations of $1.27 per share. Revenue for the period was $1.07 billion, in line with Wall Street's estimates.
Endo also raised its mesh product liability accrual by $834 million during the fourth quarter because of a higher-than-expected number of claims and additional settlements of vaginal mesh cases.
About 12.64 million of the company's shares were traded by this afternoon, well above its average volume of 3.93 million shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.
The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
"The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity.
As a counter to these strengths, the team also finds weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: ENDP