AngioDynamics Falls After Weak Quarter

NEW YORK — Shares of medical device maker AngioDynamics Inc. dropped Wednesday following quarterly results and an outlook that analysts generally regarded as weak.

AngioDynamics shares fell $4.82, or 21.3 percent, to $17.78 in afternoon trading on the Nasdaq Stock Market at more than eight times their average volume. Shares have fluctuated between $15.20 and $31.29 over the past 52 weeks.

On Tuesday, the company reported a loss of $10.4 million, or 55 cents per share, on revenue of $26.7 million. AngioDynamics posted an adjusted profit of 18 cents per share, but these results excluded $1 million in stock option expenses that analysts included with their figures. Analysts polled by Thomson Financial expected a profit of 16 cents per share on revenue of $28.4 million.

Most expenses resulted from the company’s acquisition of cancer treatment maker Rita Medical Systems Inc. for about $220 million during the quarter.

RBC Capital Markets analyst Phil Nalbone, who rates the company “outperform,” said that core business sales excluding sales from Rita fell below his estimates by $3.5 million. The analyst also cited the company’s argument that sales of the VenaCure leg vein laser have been disrupted because of a soon-to-be-decided patent infringement case with Diomed Holdings Inc.

Piper Jaffray Suraj Kalia, who maintained his “market perform” rating, said the company’s adjusted profit of 13 cents per share fell below his estimate of 17 cents per share, and lowered his estimated revenue outlook for fiscal 2008. With AngioDynamics’ 2008 outlook falling between $177 million and $183 million, Kalia lowered his estimate to $178 million from a previous $189 million.

Investment firm Raymond James considered AngioDynamics’ outlook “noisy” given higher amortization costs connected with the Rita acquisition, and expected the stock to drop given the quarterly report and ongoing litigation. However, the firm reiterated its “outperform” rating feeling that patient investors would be rewarded.

Seperately, AngioDynamics announced it appointed D. Joseph Gersuk as chief financial officer. Gersuk, 56, will become CFO effective April 16.

Gersuk succeeds Joseph Gerardi, 45, who has served as CFO since May 2004, when AngioDynamics’ stock was trading in the low teens.

SOURCE: The Houston Chronicle