) lost 17.4% since it released a disappointing preliminary result
for the third quarter of 2013 earlier this week. The precision
guided therapy tools provider for the diagnosis and treatment of
coronary and peripheral vascular disease is slated to release its
exhaustive third-quarter results on Nov 4.
A Look at Elementary Results for 3Q
For the third quarter, Volcano estimates revenues of about
$95.8 million, higher than the year-ago revenues of $93.7 million
but lower than the current Zacks Consensus Estimate of $97
Growth was led by improved revenues from peripheral IVUS
(Intravascular Imaging) and FFR (Fractional Flow Reserve)
businesses accompanied by a 20% increase in European revenues.
Revenues in the Medical segment that increased 3% (up 9% at
CER) in the third quarter to $99.0 million, based on a robust 16%
(at CER) hike in FFR single-procedure disposable business along
with a 14% rise in total consoles sales and 4% increase in
intravascular ultrasound (IVUS) single-procedure disposables.
FFR disposable sales grew 10% at CER in the U.S., 21% in
Europe and 34% in Japan offset by an 8% drag in Rest of the world
on a reported basis. On the other hand, console placement
improved 5% in the U.S., 69% in Europe, 1% in Japan and 2% in the
Rest of world compared with the year-ago quarter.
IVUS single-procedure disposables franchise revenues increased
7% in the U.S., 6% in Europe, 1% in Japan and declined 1% in the
Rest of world on a year-over-year basis. The Industrial segment
recorded revenues of $2.1 million in the quarter, down 28% year
According to the company, the U.S. business continued to be
impacted by a decline in PCI volumes. Moreover, despite growth in
FFR business in Japan, the company is not happy with the overall
performance in this region.
Volcano also provided an updated fiscal 2013 guidance and a
preliminary fiscal 2014 outlook.On a reported basis, revenues
were lowered to the range of $391.0-$395.0 million from the
earlier provided range of $394.0-$400.0 million.
The Zacks Consensus Estimate for 2013-revenues is pegged at
$398 million which stands outside the guided range. At CER, the
company expects revenue growth of 8% to 9% with medical segment
revenues increasing 9% to10%.
For 2014, Volcano expects revenue growth in the range of 9% to
11% on a reported basis and 8% to 10% at CER. It expects PCI
volume to be down 2.5% in the U.S., down 2% in Japan and flat in
Europe on year-over-year bases. Moreover, second quarter of 2014
onwards, management anticipates a 7.5% reduction in reimbursement
for all of the company's disposable products in Japan.
Favorable industry trends should lend positive momentum to
Volcano. Barring Rest of the world, the other regions showed
improvements through all the segments of Volcano. We are also
encouraged by the console revenues which increased across all
geographic regions. While we are impressed with the company's
pipeline development program, weaker guidance remains a major
The stock currently carries a Zacks Rank #3 (Hold).
Better-performing medical stocks such as
Align Technologies Inc.,
Cardinal Health, Inc.
Mindray Medical International Ltd
), carrying a Zacks Rank #1 (Strong Buy) are expected to do
ALIGN TECH INC (ALGN): Free Stock Analysis
CARDINAL HEALTH (CAH): Free Stock Analysis
MINDRAY MEDICAL (MR): Free Stock Analysis
VOLCANO CORP (VOLC): Free Stock Analysis
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