(In U.S. dollars unless noted)
* Revenue drops in second quarter
* Company lowers outlook, citing reactor shutdown
* Economic uncertainty hurting irradiator sales
* Shares fall 7.7 percent to C$8.70
June 6 (Reuters) - Shares of Nordion Inc dropped on Wednesday after the Canadian medical isotope producer reported a sharp drop in quarterly revenue late on Tuesday and cut its revenue outlook for some business segments.
The share drop came even though the company reported a net profit for its second quarter, compared with a net loss in the year-before period. But its adjusted profit, which excludes special items, fell as shipment delays and maintenance shutdowns at the NRU reactor that supplies much of its raw material hurt revenue.
Nordion cut its outlook for sales of reactor isotopes, including molybdenum-99, citing lower prices and unplanned shutdowns at the NRU facility at Chalk River, Ontario.
The Ottawa-based company said it expects reactor isotope revenue to fall 10 to 12 percent in fiscal 2012. In December, it had forecast a decline between 3 and 6 percent.
“It’s just very challenging for us to put in place supply contracts if there’s a view that we’re going to be unstable from time to time, and that’s a reality,” Chief Executive Steve West told a conference call on Wednesday.
Nordion is one of the world’s largest suppliers of moly-99, often used to diagnose cardiac problems. The aging NRU reactor is one of very few facilities that produce the needed materials for moly-99 on a commercial scale. Nordion’s effort to secure another source in Russia is still in the testing stage.
The Canadian government closed the Chalk River facility due to safety concerns in fall of 2007 and again from May 2009 to August 2010, causing a worldwide shortage of the isotopes, and encouraging many of Nordion’s customers to diversify supply sources, which hurt prices.
The company’s shares were down 7.7 percent at C$8.70 late on Wednesday morning on the Toronto Stock Exchange.
Nordion also lowered its outlook for its sterilization business, and said it expects revenue to fall 10 percent in 2012 because no irradiators, devices that use radiation to sterilize medical equipment and other items, will be shipped during the fiscal year. Nordion had previously said it expected revenue to be flat.
“We expected that we would be able to get revenue from two sales this year. We believe that those customers will still continue to move ahead with their plans, but they have deferred them,” West said.
He said both customers are in Europe, and that economic uncertainty there has affected capital investment.
The company said quarterly revenue from cobalt-60, an isotope used in sterilization, was hurt by delayed shipments, but said it expects shipments to jump in the current quarter, and maintained its forecast for flat revenue from cobalt-60 in 2012. West said Nordion shipped more cobalt-60 in May alone than it did in either its first or second quarter.
$1=$1.03 Canadian Reporting By Allison Martell; Editing by Peter Galloway