ICU Medical Inc., a supplier of infusion therapy-related medical equipment, reported fourth quarter revenue and profit that topped analysts’ expectations.
Yet, investors are unhappy, sending the stock down 9.7% to $134.96 in the eight trading sessions following the Feb. 27 announcement. At press time, the shares were down 29% since reaching a 52-week high of $196.26 last October, just before the election of Donald Trump as president. The company has a $3.4 billion market cap (Nasdaq: ICUI).
The San Clemente-based company is forecasting revenue will increase in the low-to-mid single digit range on a constant currency basis. Analysts are projecting a sales decline of 1.7% to $2.34 billion, followed by a 2.5% increase in 2026. That compares to sales increase of 5.4% in 2024 and a 1% drop in 2023.
Part of the reason for this year’s declining sales is a planned spinoff of a less profitable IV solutions unit that will reduce annual revenue by $350 million.
A bigger concern appears to be the issue of tariffs being implemented by Trump. The 2025 forecast excludes the effects of tariffs, Chief Financial Officer Brian Bonnell told analysts on a conference call.
The tariffs “could be material as approximately a third of our global revenues are for products that are manufactured in one of our three Mexico plants and then distributed through our U.S. supply chain,” he said.
“We are evaluating options to potentially mitigate the impact, ranging from rerouting our distribution channels for sales outside of the U.S. to manufacturing footprint considerations that could leverage our existing operations in Costa Rica or other locations.”
‘Not an Easy Quarter’
ICU’s fourth quarter sales climbed 7% to $630 million, and its adjusted profit was $2.11 a share, both of which beat the average estimate of five analysts for $585.1 million and $1.48 a share, according to Zacks.
The increase in revenue was boosted by the national shortage in IV solutions caused last year by Hurricane Helene, according to Chief Executive Vivek Jain.
“Q4 was not an easy quarter,” Jain told analysts on the call. “The crisis in IV Solutions, as we mentioned on the last call, brought out some of the best and worst behaviors we see in the marketplace. We had to divert a lot of attention to scaling everything up, not only in production but our warehousing work hours, our logistics networks, customer service, etc.”
ICU is now expecting 2025 adjusted profit (EBITDA) of between $395 million and $425 million. It’s also forecasting adjusted profit of $6.55 to $7.25 a share; analysts are predicting $6.77, lower than the company’s midpoint of $6.90.
In the earnings call, Jain said that 2025’s financials will be impacted by a joint venture with Otsuka Pharmaceutical Factory Inc., which is expected to close in the second quarter of this year. The joint venture will create one of the largest global IV solutions manufacturing networks with combined production of an estimated 1.4 billion annual units, according to the company.
CFO Bonnell told analysts that the spinoff into the JV will lower ICU’s adjusted profit by about $25 million annually.
The payoff will be an immediate expansion of gross margins by 3 to 4 percentage points and 1 to 2 percentage points over the long term, he said.
