West cuts guidance despite higher Q2 sales
Packaging system sales for the three months ended June 30, 2010 were $201m (€152m), up around $10m on the comparable period last year despite $4.4m in “unfavourable currency impacts.”
West said that increased demand for its Westar, FluroTec and Teflon-coated products had offset a lower revenue contribution from its standard packaging technologies, which it said had fallen due to customer inventory cuts.
Divisional operating profit was $37.6m, a modest advance on the $35.4m the group posted for the year earlier.
Similar sales growth was achieved by West’s drug delivery systems business with revenues also climbing some $10m on the year earlier period to $82m.
However, unlike the packaging systems growth which was based on in-house products, the delivery division benefited by $4.7m from sales of the Erin safety made by the Plastef Investissements subsidiary it acquired in 2009.
Excluding the Erin revenue, which did not generate any gross profit as it was covered by a pre-exiting supply agreement, operating profit from delivery system sales fell $1.4m for the quarter to $3.6m.
And, despite being positive about the revenue growth, West CEO Donald Morel still lowered the firm’s forecast for the year to earnings per share of $2.08 to $2.20 from the $2.19 to $2.35 range it announced earlier this year.
Morel also cut the firm’s 2010 revenue guidance to between $1.08bn and $1.11bn from $1.09bn to $1.12bn which fits.
To end on a positive note, Morel said West has landed its first “large-scale” order for its Daikyo Crystal Zenith syringe and anticipates finalizing significant customer-funded development agreements for the product this year.