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ICU Medical, Inc. (ICUI - Snapshot Report), a provider of medical devices, reported second quarter 2012 adjusted earnings of 63 cents, beating the Zacks Consensus Estimate of 60 cents. The results, however fell short of the year-ago earnings of 67 cents.

Net income in the quarter came in at $9.1 million, down 3.6 % year over year.

Revenues

Total revenues declined 0.7% year over year to $77.3 million, missing the Zacks Consensus Estimate of $78 million.

On a geographic basis, revenues increased 5.2% year over year in the U.S. while overseas revenues declined 13.8%.

Segment Analysis

Revenues for the Infusion Therapy segment for the six months (ended June 30) increased 6.7% year over year to $102.4 million.

Critical Care revenues for the period declined 9.5% to $29.2 million.

Revenues for the Oncology segment for the six months were $13.5 million, up 10.4% year over year.

Revenues from other sources registered $7.5 million for the same period, down 12.5% year over year.

Margins

Gross margin in the reported quarter increased to 50.6% from 46.6% in the year-ago period on the back of favorable foreign exchange rate, product mix and production optimality. Operating margin declined to 17.5% compared with 18% in the prior-year quarter.

Selling, general and administrative expenses rose 15.6% year over year to $22.8 million while research and development expenditure increased 9.5% to $2.7 million in the reported quarter.

Balance Sheet

ICU Medical ended the second quarter with cash and cash equivalents of $121.6 million, up 39.1% year over year. The company had no long-term debt. Operating cash flow in the quarter was $13.1 million, up 27.2% year over year.

Outlook

ICU Medical lowered its revenue guidance for 2012 to the range of $318 million to $325 million compared with the earlier guidance of $318 million to $330 million. The company however, raised its earnings guidance to a band of $2.55 to $2.70 per share from the earlier estimate of $2.45 to $2.70. Operating cash flow is expected to be in the range of $40 million to $50 million for 2012.

ICU Medical is a provider of complete portfolio of medical devices for hospitals in Infusion Therapy, Critical Care and Oncology applications. It plans to expand its footprint in the international market, especially in Europe on the back of increased capacity utilization and strategic marketing. However, the company faces a tough competitive landscape in certain niches with larger players like Baxter International Inc. (BAX - Analyst Report) and Becton, Dickinson and Company (BDX - Analyst Report).

ICU Medical currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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