Volcano moves the bar a notch higher for 2014 as restructuring continues

There were few surprises in the quarterly earnings report issued by Volcano ($VOLC) Monday evening. The San Diego devicemaker's ongoing turnaround effort cost it $14.5 million in the fourth quarter, part of a $20.5 million loss for the quarter and a $34.5 million loss for the year.

But Volcano booked revenue of $103.3 million for the quarter, exactly what it told investors it would report in an earnings preview issued at the J.P. Morgan Healthcare conference last month. It boosted guidance above what it forecast in that report. Volcano is now projecting an adjusted loss per share of between 16 cents and 20 cents for 2014, on revenues of $413 million to $421 million--a percentage point higher than the tamped-down 4% to 6% range of revenue growth it estimated in January.

Volcano's Q4 2013 numbers compare to a fourth-quarter 2012 in which the company reported a $2.5 million net profit on revenue of $102.5 million.

Volcano makes guided therapy tools in coronary and peripheral vascular disease. Sales in its largest unit, IVUS disposables, declined by 3.6% globally in the fourth quarter to $50.3 million--despite $2.8 million in domestic growth that brought U.S. sales to $23 million for the quarter. As of Dec. 31, its cash on hand totaled $107.2 million.

The subject of buyout chatter after repeatedly missing analyst targets, Volcano embarked on a restructuring effort in the third quarter of last year. In December, the company acquiesced to investor pressure and initiated a $200 million share buyback program. Alongside several new product launches, that helped bring the company's stock back above $20 per share. It closed Monday at $22.01.

In a statement, CEO Scott Huennekens cited the Crux filter among several recent rollouts it expects will be part of its projected 5% to 7% growth in 2014: the Verrata FFR wire, the Pioneer Plus Re-Entry Catheter that Volcano acquired during the third quarter and Instant Wave-Free Ratio FFR technology the company is rolling out in Europe and Japan.

"Volcano had a very solid quarter throughout all of its businesses and across all of our key geographies, with particular strength in our U.S. IVUS (Intravascular Ultrasound) disposable revenues as we increased our penetration of the peripheral market and recorded contributions from the Pioneer Plus Re-Entry Catheter that we acquired in the third quarter of 2013," Huennekens said.

- read Volcano's quarterly and full-year earnings
- read its preliminary earnings release

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