Home health products maker Invacare (NYSE: IVC) raised some prices earlier this year and may increase more to offset rising freight and commodity costs.
CEO Gerry Blouch said the rising costs didn’t affect the company’s first quarter financial results much, but that could change during the rest of the year. Invacare reported adjusted first-quarter net earnings of $10.5 million, or 32 cents per share, a 37 percent increase compared to the like quarter last year.
The results beat the consensus Wall Street analysts’ estimate of earnings of 25 cents per share.
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“Commodity and freight costs continue to rise, but fortunately the company did not experience much pressure in the first quarter due to our supplier contracts,” Blouch said during a conference call with analysts. “We’ll begin to feel more of this pressure in the second quarter.”
The company increased prices on some of its home health equipment in January, and its North America/Home Medical Equipment group recently announced price increases effective May 1. Its other business segments are reviewing whether freight and commodity-related price increases would be appropriate later in the year, Blouch said.
Blouch characterized the quarter as a “solid start” to the year. He pointed to a 6 percent rise in organic sales with increases in all business segments. Net sales in the quarter rose nearly 7 percent to $424 million. That figure also beat Wall Street’s expectations of $406 million.
The sales boost was driven in part by oxygen concentrators, custom power and custom manual wheelchairs and beds, according to the company.
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Invacare reconfirmed its earlier full-year guidance of adjusted earnings per share between $2.05 and $2.15.
