TROY, Michigan — Oximetry device maker Somanetics Corp. reported fourth-quarter revenue slightly below Wall Street’s projections, though its nondiluted earnings per share beat estimates.
Fourth-quarter sales rose 6 percent to $14.5 million, slightly off the consensus analyst estimate of $14.7 million. The company projects 2010 revenue at $56 million, which is below Wall Street’s expectations of $60.4 million. Somanetics cited anticipated weak capital spending by hospitals for its sales projection.
Founded in 1982, Somanetics’ main product is the Invos oximeter, which is a device that measures changes in oxygen levels in a patient’s blood. It bills its system as the first adult and pediatric brain oximeter and the first to simultaneously measure blood in a patient’s brain and body. The Invos is in use at more than 700 hospitals, according to the company.
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The company’s fourth-quarter profit before taxes dropped sharply to $2.4 million from $5.1 million in the like quarter last year. Excluding fees related to two licensing deals, the company’s earnings per share came in at 22 cents, better than analysts’ expectations of 18 cents.
For the full year, sales rose 5 percent to $50 million. Net income plummeted 35 percent to $6.8 million.
“We are pleased to have achieved record revenues in 2009 in this difficult economic climate,” said Bruce Barrett, Somanetics’ chief executive officer. “Unit sales of our disposable sensors, which is the best indicator of customer demand for the Invos system, increased 22 percent in the fourth quarter and 18 percent for the year.
Somanetics completed two key technology licensing deals in 2009. One was for cerebral autoregulation technology that was developed at The Johns Hopkins University. Cerebral autoregulation refers to the body’s ability to maintain constant blood flow to the brain despite changes in blood pressure, according to the statement.
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If Somanetics is able to integrate the technology with its Invos system, it would create the “first noninvasive monitor providing cerebral autoregulation data for routine clinical use,” the company says. The company expects it to hit the market in the first half of next year.
In the other deal, Somanetics signed a license agreement with an inventor to develop a product that uses Invos’ technology to monitor and detect compartment syndrome. Compartment syndrome is a limb- and life-threatening condition that occurs as the pressure rises as a result of tissue injury or trauma in a leg, arm or hand, according to the statement.
Compartment syndrome often affects soldiers injured in combat. As part of the license agreement, Somanetics expects to receive approximately $2.1 million through a Defense Department grant to develop the compartment syndrome product.