Invisalign producer warns about decline in China, shares plunge 25%
An orthodontist uses a process called invisalign to straighten out the patient's teeth.
Sammy Dallal Getty Images | Digital First Media | Getty Images
Shares of Align Technology, the company that makes Invisalign clear teeth devices, plunged the back of Thursday on a fierce warning of China and weaker results than expected.
CEO of Align Technology, Joe Hogan, said in a statement that second-quarter Invisalign shipments were lower than expected, "primarily due to a softness in China related to a tougher consumer environment."
The company sent 377,1[ads1]00 cases of Invisalign last quarter. Wall Street expected Align to ship 382,900 cases, according to FactSet. Similar shares fell more than 25% in early trading on Thursday.
"Given the uncertainty in China, our third-quarter outlook reflects a more cautious outlook for growth in the Asia-Pacific region," Hogan said. Align expects revenue in the third quarter to be between $ 1.09 per share and $ 1.16. Analysts asked by FactSet expected a median guidance of $ 1.45 earnings per share.
On top of that, Align's earnings in the second quarter fell below expectations. The company earned $ 1.33 per share, well below a Refinitive estimate of $ 1.51.
Hogan's warning and the company's weaker results than expected come when China and the US negotiate to end a trade war that has been going on for more than a year. A US delegation is scheduled to fly to China next week for further talks on the matter.
Hogan will be on CNBC's "Mad Money" Thursday night to give more details on China's slowdown.
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