Symmetry Medical Earnings: Here’s Why the Stock is Falling Now

Symmetry Medical, Inc. (NYSE:SMA) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 17.23%.

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Symmetry Medical, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 33.33% to $0.06 in the quarter versus EPS of $0.09 in the year-earlier quarter.

Revenue: Decreased 1.78% to $98.9 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Symmetry Medical, Inc. reported adjusted EPS income of $0.06 per share. By that measure, the company missed the mean analyst estimate of $0.15. It missed the average revenue estimate of $106.04 million.

Quoting Management: Thomas J. Sullivan, President and Chief Executive Officer of Symmetry Medical, stated, “We are pleased with the continued strengthening of our OEM Solutions segment with its third consecutive quarter of year over year growth. This segment remains well positioned for continued revenue growth commensurate with the orthopedic procedure market and to benefit from our ongoing efforts to improve operational efficiency. In our Symmetry Surgical segment, we experienced revenue weakness in both the U.S. and International markets as we struggled with specific elements of our late 2012 transactional integration of the Codman surgical instruments business. Domestically, we continue to align customer-specific purchasing transactions to Symmetry Surgical. Internationally, sales to our new distributors have been weak as they transition regulatory authorizations; establish awareness with their hospital customers; and ramp up country specific marketing and sales activities. While we are disappointed with our Symmetry Surgical sales results, we believe we have identified the issues and are implementing corrective actions that we expect will gradually reinvigorate growth in Symmetry Surgical by year end. Despite these segment specific challenges, we are maintaining our overall 2013 guidance.”

Key Stats (on next page)…

Revenue decreased 7.19% from $106.56 million in the previous quarter. EPS decreased 64.71% from $0.17 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.19 to a profit $0.18. For the current year, the average estimate has moved down from a profit of $0.77 to a profit of $0.71 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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