Recently, Conceptus Inc. (CPTS: 12.63 -3.16 -20.01%), a contraception device maker, revised downward its second quarter and full year 2010 sales and earnings per share guidance range. The company expects its second quarter net sales to be in a range of $36.8 million - $36.9 million as compared with the previous guidance of $39.5 million - $41.0 million.GAAP loss per share is expected in the range of 2 cents -1 cent, down from the prior earnings guidance of 0 cent - 3 cents per share. Moreover, excluding certain items, Conceptus lowered its EPS guidance to 10 cents -11 cents from the prior guidance of 12 cents -15 cents.
For the fiscal year 2010, the company lowered the net sales guidance range from $160.0 million - $165.0 million to a range of $143.0 million - $145.0 million. The revised guidance reflects a year-over-year growth of 9% -10%, including the unit volume growth of 30% in the international market.
GAAP EPS and EPS, excluding certain items are expected in the range 21 cents - 26 cents and 70 cents - 75 cents for fiscal 2010 as compared with the previous ranges, 50 cents - 55 cents and $0.99 - $1.04, respectively.
The tightening of the guidance range by Conceptus followed a reduction in physician office visits due to various domestic factors such as increase in the unemployment rates, unfavorable currency impact as well as the steps taken by the company associated with the competitive trails. Conceptus expects domestic physician visits in fiscal 2010 to be lower by 5% - 10% year over year. In addition, the negative currency effect will influence the sales by $4.0 million and EPS by approximately 9 cents.
Conceptus derives a major share of its revenue from Essure Permanent Birth Control system, approved for sale in many countries, including the US. Domestic sales of the Essure system increased 20% year-over-year to $25.4 million and international sales increased 33% year-over-year to $8.0 million in the first quarter of 2010.
The level of sales for the Essure system is dependent on the number of physicians trained to perform the procedure. Conceptus is working to make the system available worldwide by raising consumer and physician awareness as well as imparting training to the physicians on performing the procedure.The Essure procedure faces direct competition from Adiana, a hysteroscopic sterilization method that is manufactured and sold by Hologic Inc. (HOLX: 13.985-0.245 -1.72%) in Europe and the US. However, Essure’s unique features such as higher effectiveness rate, no risks from the use of radiofrequency energy and radio opaque micro-inserts, give it a significant advantage over its competitors.
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