Advanced Medical Optics has reported a fourth-quarter $7.6m loss compared to a profit of $2.3m a year ago, mainly because of lower revenue related to a product recall.
The company recalled some 2.9m units of eye care products from Asia Pacific, Japan and US markets in November, following a production line issue at its plant in China, affecting fourth-quarter and full-year 2006 eye care sales by $25m. AMO anticipates losing an additional $20m to $25m in sales in 2007. Production for the European markets was uninterrupted as they are supplied by the company's facility in Spain.
Jim Mazzo, AMO chairman, president and CEO, said that the company made progress in establishing AMO as the refractive company. He added: 'We successfully repositioned our eye care business by streamlining our offering to focus on higher-margin products, while aggressively addressing the recall at the end of the year. In addition, we prepared to introduce a series of new products across each of our businesses in 2007.'
Eye care sales declined by 13.1 per cent in 2006 to $261m, reflecting the recall, a fall in hydrogen peroxide solution sales and lost sales associated with planned product rationalisations. In the fourth quarter eye care sales declined 20 per cent to $53m.
Multipurpose solution sales declined 4.7 per cent, with growth in the first nine months offset by the recall. In the US, sales of Complete MoisturePlus, however, rose 48 per cent for the year and 25.7 per cent in the fourth quarter. Hydrogen peroxide sales fell 19.4 per cent to $62.3m and 23.6 per cent to $13.9m in the fourth quarter, reflecting market contraction in Japan and Europe and planned product rationalisation.