Align Technology stock plummets more than 20% as China sales woes hit earnings forecast
Align Technology Inc. shares plunged more than 20% in late trading Wednesday, after the company said that China sales were hurting and gave a weaker-than-expected forecast. Align's second-quarter results easily beat expectations, but Chief Executive Joe Hogan noted that case shipments of its signature Invisalign dental product were lower, and financial results for the third quarter would be affected. "In Q2, total Invisalign case shipments were lower than expected, primarily due to a softness in China related to a tougher consumer environment and slower growth in young adult case in North America," Rogan said in the announcement. "Given the uncertainty in China, our outlook for the third quarter reflects a more cautious view for growth in the Asia Pacific region." Align reported second-quarter earnings of $147.1 million, or $1.83 a share, on revenue of $600.7 million, easily beating the average analyst estimate of $1.43 a share on revenue of $598 million, according to FactSet. For the third quarter, Align predicted earnings of $1.09 to $1.16 a share, lower than the year-ago quarter, and revenue of $585 million to $600 million. Analysts on average expected third-quarter profit of $1.45 a share on sales of $624 million, according to FactSet. After closing with a 0.8% gain at $275.16, shares fell lower than $220 in after-hours trading Wednesday.
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