Halyard Health Shares Climb as Profit Beats Expectations
05 May 2016 - 6:00AM
Dow Jones News
Halyard Health Inc. reported better-than-expected earnings
Wednesday, sending shares higher, as the company seeks to quell
concerns raised in a recent "60 Minutes" report over the quality of
its surgical gowns.
Halyard's stock, which hit an intraday high of $29.75 Wednesday,
rose 5.8% to $28.27 in recent afternoon trading. Before the results
Wednesday, the stock had fallen 15% since Thursday, on concerns
raised by the CBS report.
In a conference call, Halyard Chairman and Chief Executive
Robert Abernathy reiterated the company's belief that its Microcool
surgical gowns have an "exceptional" record.
The "60 Minutes" report accused the company of selling defective
protective equipment to health-care workers following the recent
Ebola outbreak. Halyard was spun off from Kimberly-Clark Corp. in
2014.
Halyard has said it received fewer than one complaint for every
million gowns sold and that it hasn't heard of a health-care
professional being infected as a result of a flaw in its
product.
CBS News said Wednesday it stood by its report.
In the latest quarter, Halyard said sales in its surgical and
infection prevention unit edged down to $254.7 million. Sales
volume climbed 4% on strong demand for exam gloves in North America
but were offset in part by lower selling price for the gloves.
Sales in the company's smaller medical devices unit increased 4%
to $126.7 million. All other sales, including sales of
non-healthcare products by Kimberly-Clark, fell to $3.4 million
from $17.1 million a year ago.
Over all, Halyard's profit fell to $14.2 million, or 30 cents a
share, from $21.7 million, or 46 cents a share, a year ago.
The company said that excluding special items—such as
acquisition-related charges, litigation and legal expenses, and a
tax rate change in Thailand—it earned 53 cents a share. Analysts
expected 34 cents a share, according to Thomson Reuters.
Revenue slipped 2.4%, or 1% in constant currencies, to $384.8
million. Analysts anticipated $371.4 million.
The company also backed its 2016 adjusted per-share profit
forecast of $1.50 to $1.70. On the call, Mr. Abernathy said the "60
Minutes" report wasn't considered when the company decided to
maintain the guidance range.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
May 04, 2016 15:45 ET (19:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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