(Adds comments from conference call, background, byline)
By Susan Kelly
CHICAGO Aug 4 Advanced Medical Optics Inc
EYE.N posted lower-than-expected quarterly earnings on Monday
and cut its full-year profit forecast, as the weak U.S. economy
hurt demand for LASIK vision-correction procedures.
"Obviously, the LASIK market has gotten a lot worse than
what we thought in January," said Jefferies & Co analyst Peter
Advanced Medical shares, which initially plummeted more
than 11 percent to new five-year lows on the news, recouped all
of their early loss and turned higher to trade up 2 percent in
But Wall Street had anticipated weak U.S. LASIK procedure
volumes as the U.S. consumer has grown cautious about spending
on elective procedures.
"From a top-line or bottom-line standpoint, I don't
envision changing my forward numbers," Bye said.
LASIK, short for laser-assisted in-situ keratomileusis,
involves the use of a laser to reshape the cornea to correct
Advanced Medical, a maker of eye-care products, as well as
the lasers used in vision correction surgery, said second-
quarter net income was $22 million, or 35 cents a share. In
last year's second quarter, the company posted a net loss of
$166.8 million, or $2.78 a share, as it booked costs from its
recall of a contact lens solution and its April 2007
acquisition of IntraLase Corp.
Excluding special items in the latest quarter, Advanced
Medical earned 24 cents a share. On that basis, the average
forecast of analysts was 27 cents a share, according to Reuters
Sales rose 22.6 percent to $320.5 million, boosted by a
rebound in eye care product sales after a 2007 contact lens
solution recall, strong overseas sales and strong cataract
Jim Mazzo, Advanced Medical's chairman and chief executive,
said the company is taking share from competitors, despite the
shrinking market and is focused on overseas expansion and cost
reductions to offset weak U.S. demand.
Still, Advanced Medical cut its forecast for full-year
earnings to a range of $1.00 to $1.15 per share before special
items, down from a prior forecast of $1.25 to $1.45 per share.
It cited a lower outlook for U.S. vision-correction procedures,
forecasting a 25 percent drop in its volume from year-ago
levels and 30 percent decline for the total market.
"We're obviously not pleased with having to reduce our
guidance due to the U.S. economic conditions. However, I
believe that the second quarter shows our focus on maximizing
things we can control to enhance our earnings power," Mazzo
told analysts on a conference call.
The Santa Ana, California-based company left its full-year
revenue outlook unchanged at $1.22 billion to $1.24 billion.
Advanced Medical shares were at $17.48, up 28 cents, in
afternoon trading on the New York Stock Exchange.
Last week, LCA-Vision Inc, which operates a chain of LASIK
surgery providers, said procedure volume plunged 38 percent in
the second quarter and it cut 25 percent of it work force.
(Reporting by Susan Kelly; editing by John Wallace and Steve