Chindex International Inc, a provider of western healthcare products and services in China, posted a 38 percent drop in quarterly profit, hurt by a review of import approvals by the Chinese government, sending its shares down as much as 28 percent.
The company supplies medical equipment to China from several companies including Intuitive Surgical Inc, the maker of the da Vinci surgical robots.
The company said the Chinese government's review, a routine process, is impacting new, big ticket medical products.
Revenue from the medical products division fell 10 percent to $17.1 million due to delays in the order cycle for high-value capital medical equipment, particularly robotic surgical systems.
However, it said expectations for the order flow for da Vinci's has not changed and it continues to expect sales of one to two systems per quarter on average, over time.
Chindex said it did not realize any sales of robotic surgical systems during the quarter and sales of diagnostic ultrasound, women's health imaging, clinical chemistry and cosmetic laser systems products increased at lower-than -expected rates.
The company's healthcare services division, which operates a network of private healthcare facilities in China, grew 10 percent to $21 million, but this was offset by disruption due to construction of the expanded facility in Beijing.
For the quarter, total revenue remained flat at $38.1 million. Net income was $538,000, or 3 cents a share, compared with net income of $862,000, or 5 cents a share, in the year-ago period.
Shares of Chindex were down 21 percent at $12.83 in morning trade Monday on Nasdaq. They had earlier touched a low of $11.62.
(Reporting by Jennifer Robin Raj in Bangalore; Editing by Unnikrishnan Nair)