Laser Skin Treatment Market Slowing Down

Cutera Drops After Removing Forecast

Tuesday November 6, 1:32 pm ET

Cutera Shares Sink After Company Withdraws Forecast on Weak Sales of Pearl Skin Laser Systems

NEW YORK (AP) -- Shares of Cutera Inc. fell to an annual low Tuesday after the company suspended its full-year profit forecast, saying sales of its Pearl laser have been disappointing and growth in the laser skin treatment market may be slowing down.

The Pearl laser, which is designed to reduce wrinkles and generate new collagen growth, reached the market during the quarter. Cutera said its current customers are buying Pearl systems, but new customers have been slow to adopt the system.

The company said it can no longer predict results from future quarters because market growth is slowing down. In August, Cutera forecast a full-year profit of 88 cents per share, or $1.15 per share excluding charges, on $111 million in revenue.

Analysts polled by Thomson Financial expect a profit of $1.13 for the year, on $109.1 million in sales.

Shares sank $2.68, or 13 percent, to $17.78 in midday trading and reached a low of $17.25.

Merriman Curhan Ford analyst Jose Haresco said the retraction of Cutera's outlook was "a nod ... to the dour sentiment in the laser-aesthetic sector."

Cutera reported third-quarter results in line with estimates after the bell Monday, although Needham & Co. analyst Dalton Chandler said results met his estimates in unexpected ways, with a low tax rate helping to offset weaker-than-expected margins.

That could signal unpredictable results in future quarters, he said.

In the quarter ended Sept. 30, Cutera's profit grew 4.8 percent to $3.09 million, or 22 cents per share, from $2.95 million, or 21 cents per share, on fewer shares outstanding. Excluding stock-based compensation costs, the company earned 30 cents per share.

Revenue rose 12 percent to $28.1 million from $25.1 million

Analysts expected 29 cents per share on $27.7 million in revenue.