Symmetry Medical Inc. (SMA) has lowered its revenues and earnings per share guidance for the full fiscal 2009. Revenues are now expected in the range of $355 to $365 million, lower than its previous guidance of $385 to $405 million. Earnings per share are estimated in the range of 63 to 68 cents, compared to the prior guidance of 77 to 85 cents.
Shares of Symmetry reacted negatively to the news, with price declining roughly 18% to close at $7.84 at the end of Oct 26, 2009. The company lowered its guidance on the back of lower order flows due to the current economic turbulence. The present global turmoil resulted in customers deferring their buying decisions.
Symmetry Medical is the largest original equipment manufacturer (OEM) provider of orthopedic implants and instruments to orthopedic device manufacturers. The company has created a distinct competitive position in the orthopedic device market with its Total Solutions approach. Under the approach, customers are provided with a broad range of products relating to orthopedic implants as well as comprehensive services and production capabilities to bring these implant systems from the drawing board design stage to commercialization in a timely and cost efficient manner.
Most of Symmetry’s customers are expanding outsourcing, realizing the benefits of a “one-stop shop” solution that allows them to focus their efforts on marketing and R&D. Total Solutions will not only provide the company with growth opportunities but also increase the relative percentage of value-added products provided to customers.
Symmetry’s Total Solutions approach has helped increase its market share. Based on the company’s second quarter of 2009 results, we have assigned a “Neutral” rating to the stock.
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