Shares in Protolabs (NYSE: PRLB) dropped by nearly 9% today on news of second-quarter medical device sales that would have been worse had it not been for orders that came in response to COVID-19.
The Maple Plain, Minn.-based rapid manufacturing company reported profits of $12.6 million or $0.47 per share, on sales of $106.58 million for the three months ended June 30, 2020, for a bottom-line drop of -22% on a sales shrinkage of -8.86% compared with Q2 2019.
Adjusted to exclude one-time items, earnings per share were $0.59, 23¢ ahead of The Street, where analysts were looking for sales of $100.46 million.
CEO Vicki Holt told analysts that without COVID-related orders, the company’s medical sales declined by 14%, according to an earnings call transcribed by The Motley Fool.
“To date, we’ve manufactured and shipped over 8 million parts to be incorporated into products responding to COVID-19 at many different medical-related customers resulting in $12 million of revenue recognized in the second quarter,” Holt added.
COVID-related orders generated $5 million in revenue in April, followed by a lackluster May and a slightly better June, Holt told analysts. In a survey of more than 500 customers, Protolabs learned that 43% of respondents had experienced a decrease in demand for their products. Regarding timing and development schedules, 58% of customers surveyed said they project development has been delayed and 33% have seen reductions in project funding.
“These changes are reflected in our revenue performance in a number of unique product developers served in the second quarter of 2020,” Holt said.
Since its founding in 1999, Protolabs’ fast manufacturing processes have helped created medical-related products ranging from fitness trackers to a blood-clot-detecting ultrasound system to ear-cleaning headphones. The company continues to pursue Protolabs 2.0, a $10 million update of the business that Holt said last year would begin in the second half of 2020. The update will include improvements to the company’s e-commerce business and back-end systems, according to chief technology officer Rich Baker.
PRLB shares were down -8.77% at $125.83 per share in after-hours trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — was down -0.96%.
