Investors kick Volcano hard over Q3 revenue predictions

Volcano ($VOLC) said it expects 2013 third-quarter revenue to inch moderately higher. But investors wanted far more, and they punished the San Diego device company for setting diminished expectations.

The maker of intravascular imaging, diagnostic and therapeutic devices watched its shares plunge 17% before trading formally opened on Oct. 29. Once the bell rang, the price improved slightly, hitting $20.97 by late morning, but down almost 14% from the day before.

Volcano, in preliminary numbers, said its third-quarter revenue would hit $95.8 million, up from $93.7 million over the same period in 2012. For the year, Volcano is now giving guidance of between $391 and $395 million in revenue for 2013, versus $381.9 million in 2012. Executives warn that foreign exchange rates will have a negative impact on the full 2013 third-quarter numbers, despite a large hike in European revenues. Also, the company said Japanese revenues for its fractional flow reserve business did not meet expectations, and that percutaneous coronary interventions in the U.S. continue to decline, affecting the company's U.S. product sales.

Volcano President and CEO Scott Huennekens said in a statement that revenue for 2014 should grow by 9% to 11% based on new product launches and reimbursement decisions for major products in Japan. He added that "as these new offerings continue to ramp in 2014, we would expect that Volcano can return to annual growth in the low-to-mid-teens on a reported basis beginning in 2015."

That may be. But for now, investors aren't pleased with the preliminary numbers, which don't mention net income. Analysts including Credit Suisse, Canaccord and JP Morgan Chase all downgraded the company, according to The Associated Press.

Full results will be released on Monday, Nov. 4.

- read the release
- here's the AP's take

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