What happened
Shares of Organogenesis Holdings (ORGO 2.85%) were down more than 19% as of 11 a.m. on Thursday after the company announced second-quarter earnings and withdrew annual guidance after the markets closed on Wednesday. The stock is up less than 1% so far this year.
So what
Organogenesis is a healthcare company that makes advanced care products for the wound-healing process. On Wednesday, the company reported second-quarter revenue of $117.3 million, down 3% year over year. The company operates in two segments, Advanced Wound Care and Surgical & Sports Medicine, and both saw declines. The first reported revenue of $110.1 million, down 3%, and the second reported revenue of $7.2 million, down 5%.
The company also said it had net income of $5.3 million, or $0.04 in earnings per share (EPS), compared to $8.7 million, or $0.07 in EPS in the same period a year ago.
The third blow to investors was that the company withdrew 2023 guidance, saying it was because of uncertainty due to Medicare (CMS) contractors Novitas, First Coast Services, and CGS deciding to limit coverage for treatments of diabetic foot ulcers and venous leg ulcers of products made by Organogenesis.
Now what
While revenue and net income were down, they are better than the company initially forecasted. The main reason the stock dropped is the withdrawn guidance. The company, in its earnings call, said it is working with CMS to clear up the issue of having some of its wound products not covered. Of the 130 products that were identified as not covered in certain jurisdictions, five of them were produced by Organogenesis. The company said the five were improperly excluded from the coverage lists.
