Shares of Novanta took a hit after the medical technology company reported a decline in third-quarter profit and warned of weaker demand for its products. The stock plunged 16% to $116.16 on Tuesday, hitting a 52-week low of $111.20 during intraday trading. Overall, shares have fallen 15% this year.
Decline in Profit
Novanta, based in Bedford, Mass., saw its profit drop to $21.2 million, or 59 cents a share, for the quarter ended September 29. This compares to $22.5 million, or 63 cents a share, for the same period last year.
Impact of Interest Rates
Chief Executive Matthijs Glastra attributed the decline in demand to companies delaying purchases due to interest rates. This is having an impact on the overall end-market demand for Novanta's products.
In light of the current situation, Novanta now expects full-year revenue to range between $878 million and $882 million. This is a revision from their previous outlook of $892 million to $902 million.
Decline in Revenue
Novanta's revenue for the quarter dropped by 0.7% to $221.5 million. However, after adjusting for foreign exchange and acquisitions, revenue actually declined by 3.3%.
Adjusted Profit Outlook
As a result of these challenges, Novanta is now forecasting an adjusted full-year profit of $2.98 to $3.05 per share. This is a slight adjustment from their previous guidance of $2.96 to $3.15 per share.