Prelim Results of CPTS Disappoints - Analyst Blog

Conceptus (CPTS) has reported disappointing preliminary results for the fourth quarter and full year of fiscal 2010. The company expects net sales of $36.3-$36.6 million during the fourth quarter which is approximately 1-2% lower than the year-ago quarter, although up 7-8% on a sequential basis.

Moreover, the expected revenue is lower than Conceptus' guidance of $39-$41 million and the Zacks Consensus Estimate of $39 million. Following the announcement, shares of the company were down nearly 6% after market yesterday.

As a result of disappointing fourth quarter performance, Conceptus' full year revenue estimate of $140.4-$140.7 million is lower than its guidance of $143-$145 million and the Zacks Consensus Estimate of $143 million. Conceptus derives a major share of its revenues from Essure, which is a permanent birth control system, approved for sale in many countries, including the US.

The company witnessed a challenging quarter primarily due to lower OB/GYN office visits compared with the year-ago quarter. Contrary to expectation, a surge in elective procedures such as the Essure system was not witnessed during the quarter. Moreover, sales might have been impacted by higher competition from Hologic (HOLX)'s Adiana system.

Despite these factors, Conceptus is confident of better performance banking on the increase in its sales force in July 2010. Greater focus on sales should lead to more physicians performing the procedure. Sales of the Essure system depends on the number of physicians trained to perform the procedure. The company is working to make the system available worldwide by raising consumer and physician awareness as well as imparting training to the physicians for performing the procedure.

Moreover, according to Conceptus, customers prefer the Essure procedure compared with the competitor's Adiana. Detailed analysis will be possible only after the company reports final results, that are expected in February 2011.

 
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