CareFusion Q3 Results Miss Estimates, Backs 2014 Outlook

(RTTNews) - Medical device company CareFusion Corp. (CFN), formed through a spin-off from Cardinal Health Corp. (CAH) in 2009, reported Monday a profit for the third quarter that increased from last year, reflecting lower expenses and revenue growth. However, adjusted earnings per share and quarterly revenues missed analysts' expectations. The company also reaffirmed its earnings guidance range for the full-year 2014, while raising annual revenue growth outlook.

"Our team continued to make progress during the quarter, and as a result, we are well positioned to finish the fiscal year strong. The entire Procedural Solutions segment once again outperformed our expectations, delivering its seventh consecutive quarter of organic growth," Chairman and CEO Kieran Gallahue said in a statement.

Gallahue added that the medical systems revenue was below expectations as the company continued to roll out its new dispensing technologies platform and refine its installation processes in partnership with customers.

The San Diego, California-based company reported net income of $102 million or $0.48 per share for the third quarter, higher than $84 million or $0.37 per share in the prior-year quarter.

Excluding items, adjusted income from continuing operations for the quarter was $127 million or $0.60 per share, compared to $134 million or $0.59 per share in the year-ago quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.62 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 7 percent to $968 million from $901 million in the same quarter last year, driven by continued growth in procedural solutions segment, but missed twelve Wall Street analysts' consensus estimate of $986.67 million.

Medical systems revenues for the quarter declined 2 percent to $571 million, while procedural solutions revenues grew 25 percent to $397 million from the year-ago quarter.

Looking ahead to fiscal 2014, CareFusion continues to expect adjusted earnings from continuing operations in a range of $2.30 to $2.40 per share, but at the low end of the range, on projected annual organic revenue growth of 2 to 4 percent, compared to the prior forecast of 1 to 4 percent.

Street is currently looking for full-year 2014 earnings of $2.34 per share, on annual revenues of $3.77 billion.

"We are encouraged by the positive feedback we're receiving and continue to see momentum building. We have achieved an all-time record backlog in Dispensing, giving us confidence as we prepare to close out the fourth quarter and enter fiscal 2015," Gallahue added.

CFN closed Monday's regular trading session at $39.39, up $0.33 or 0.84% on a volume of 1.55 million shares. However, the stock lost $0.49 or 1.24 in after-hours trading.