Contact Lens Maker Draws Wall Street’s Focus

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Over the past few years, implantable contact lens maker Staar Surgical Co. has missed investors’ expectations more often than it has met them.

As a result, the Monrovia company’s stock has fallen from about $11 a share a year ago to around $5 dollar in recent months. But Staar executives last week previewed better-than-expected revenue for the most recent quarter, sending Staar stock up 21 percent for the week ended April 10 and making it the biggest gainer on the LABJ Stock Index. (See page 46.)

Staar shares closed at $6.41 on April 10, up more than a dollar from $5.31 the previous week. The company last week released preliminary results for the quarter ended March 31, reporting revenue of $18 million. That’s a 16 percent increase over the same quarter a year ago and well above analysts’ consensus estimate of $16.5 million.

“Overall, it appears to have been a very solid quarter from a revenue standpoint,” said Bruce Johnson, an analyst at Northland Capital Markets in Minneapolis who is now expecting the company to report adjusted first-quarter earnings equal to 6 cents a share, up from 5 cents.

Staar makes implantable lenses used to replace natural eye lenses after cataract surgery or as an alternative to laser surgery.

The company’s better-than-expected results last quarter came largely from a big increase in sales of its noncataract lenses, which grew 24 percent over the same quarter last year.

Barry Caldwell, Staar’s chief executive, said the company could be doing even better.

Revenue from sales of cataract replacement lenses were flat for the quarter but would have been up about 10 percent if not for unfavorable currency exchange rates in Japan, one of Staar’s biggest markets. In Europe, Staar is struggling to meet demand for cataract replacement lenses that come preloaded into a device, designed by Staar, that makes it easier for an ophthalmologist to insert them.

“Even so, our year is off to a good start,” Caldwell said.

However, none of the seven analysts who follow the company increased their target prices for Staar stock after last week’s announcement. Most list a target of $8.


Staff reporter James Rufus Koren contributed to this article.

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