Shares of ICU Medical Inc. jumped 11% on Tuesday, a day after the company reported first-quarter earnings that easily beat Wall Street expectations.
The San Clemente-based device maker said after the close of trading Monday that its first-quarter revenue rose 22% on increased sales of its core needle-free medical device.
ICU posted net income of $4.4 million on revenue of $27.1 million for the quarter ended March 31, compared with a profit of $4.1 million on revenue of $22.2 million in the year-ago quarter. Analysts were looking for net income of about $3 million and sales of $22.1 million.
Shares traded as high as $36.8 before settling back at $35.3, still close to its 52-week high of $37.7.
Last year ICU’s shares took a sever dip after a key customer,Lake Forest, Ill.-based Hospira Inc.,cut its purchases of some ICU gear. The company now says the Hospira issue is in the past.
Meanwhile, ICI also said that its $35 million purchase of a Salt Lake City manufacturing plant from Hospira would add about $50 million to its 2005 revenue. The deal is set to close May 1.
ICU’s acquisition of the plant is part of a larger deal between the companies. It calls for ICU, a maker of medical connectors and intravenous systems, to make critical care products at the plant, plus develop catheters, angiography kits and cardiac monitoring systems with Hospira.
ICU’s relationship with Hospira, a spinoff from Abbott Laboratories Inc., has concerned some Wall Street analysts in the past.
Last year, when Hospira cut its buying of ICU’s Clave intravenous device, ICU’s sales fell 35%. Hospira still accounted for more than half ICU’s sales at the time.
“The first quarter of 2005 is the best quarter we have had in a year and is a clear sign that the effect of Hospira’s inventory reduction in 2004 is behind us,” said Francis O’Brien, ICU’s chief financial officer, in a release.
O’Brien also pointed out that sales of Clave, ICU’s flagship needle-free system to deliver intravenous fluids, both to Hospira and other channels, “were all up significantly.”
