Mindray tanks on disappointing Q3
Mindray Medical ($MR), China's largest medical device outfit, has had a rough couple days, posting a 4.2% net income drop in the third quarter and getting pilloried by shareholders as a result.
The company reported $35.8 million in Q3 profit, down from $37.3 million the year before, and the disappointing news battered Mindray's stock, which closed at $34.50 on Monday but dipped as low as $31.69 Tuesday, eventually rallying to $31.91. The 7.5% decline was Mindray's biggest slump in a year, Bloomberg reports.
Despite the net income drop, Mindray grew its revenue by 17.7%, reaching $257.1 million in Q3. Mindray clocked 25.9% sales growth in China and an 11.6% jump abroad. Each of the company's units reported boosts on the quarter, including 8% for patient monitoring, 14.4% for medical imaging and a whopping 30.3% for in-vitro diagnostics. However, escalating costs, administrative expenses and R&D spending negated the growth and alarmed investors.
Perhaps unrelatedly, Mindray is changing the organization of its front office, doing away with its co-CEO setup. The company announced yesterday that Li Xiting will remain as sole CEO, while former co-chief Xu Hang will step down to serve as chairman, a move the company says will strengthen its corporate governance.