Avanos Medical, a leading medical-technology company, has recently warned that its fourth-quarter results will fall short of expectations. The company also announced a cut in its 2024 sales forecast. This news comes as a disappointment to both investors and analysts alike.
Q4 Sales Shortfall
Avanos anticipates reporting fourth-quarter sales ranging from $170 million to $173 million. Furthermore, their full-year 2023 sales are projected to be in the range of $670 million to $673 million. Unfortunately, these figures are shy of the $675 million to $685 million forecasted by the company back in November. Analysts polled by FactSet were expecting quarterly sales of $179.3 million.
Avanos attributed this sales shortfall to multiple factors, including underperformance in their hyaluronic-acid pain-relief injection products. The pricing pressure resulting from Medicare reimbursement changes significantly affected the sales of these products.
Moreover, Avanos reported lower-than-expected sales in their North American digestive-health products due to a change in ordering patterns by a major distributor. Additionally, their North American pain-management and recovery sales also fell below internal expectations.
Although the company acknowledged that this sales shortfall would impact their adjusted per-share earnings for the quarter, they were unable to quantify the overall impact at this time.
Revised Sales Forecast for 2024
Avanos now expects sales for 2024 to be in the range of $685 million to $705 million. This revision reflects the ongoing market dynamics related to hyaluronic-acid products. However, the company is maintaining its financial objectives for 2025.
Meanwhile, Wall Street analysts are projecting 2024 sales of approximately $714.4 million for Avanos.
This disappointing news highlights the challenges faced by Avanos Medical as they work towards achieving their financial goals. The company will need to carefully navigate the evolving market dynamics and explore strategies to regain momentum in the coming quarters.