Urohealth Stock Drops After Earnings Warning

Urohealth Systems stock retreated sharply Wednesday for the second consecutive day as the medical equipment company said its earnings for the last fiscal year won’t meet analysts’ estimates.

In the last two days, the stock has lost 27% of its value on two developments related to the company’s latest earnings report.

The stock fell 18.6%, or $1.44 cents a share, to $6.31 in heavy trading on the Nasdaq market after Urohealth said financial results will fall below estimates for the year as the company shifts some revenue into the current year.

The stock had fallen nearly 10% on Tuesday after Urohealth announced another delay in releasing earnings for the year and fourth quarter ended March 31. The company attributed the delays to a time-consuming audit required because of several acquisitions.

The company said it expects to report its results by Monday.

The company said that on the advice of its auditors, $18 million in revenue will be moved to fiscal 1998 from fiscal 1997.

Urohealth had revenue of $39.6 million in fiscal 1996. For the first three quarters of fiscal 1997, the company reported $68 million in revenue.

The company was expected to earn 17 cents a share in the fourth quarter and 48 cents for the year, based on the average estimates of five analysts surveyed by IBES International Inc. The company posted a loss of $1.50 a share for fiscal 1996.

The company said analysts’ current estimates exclude charges associated with a merger, write-down of purchased research and development, restructuring and others.

Urohealth makes products used in urology, gynecology and general surgery.

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Double Whammy

Urohealth System’s stock has dropped more than 27% in the last two days. The stock tumbled 18.6% Wednesday after the Irvine company said earnings would fall short of analysts’ expectations. The stock dropped 10.5% Tuesday on news that the fiscal-year earnings release would be delayed. Closing prices for the past 10 trading days:

Wednesday’s close: $6.31

Source: Bloomberg News