ConvaTec slashes forecast on change in customer's inventory policy

British medical devices maker ConvaTec on Monday lowered its expectations for organic revenue and adjusted operating earnings margin for the full year, citing a change in inventory policy by its largest customer in its Infusion Devices business.

Convatec, which makes catheters and colostomy bags, also said its Chief Executive Officer Paul Moraviec will retire immediately and that it has appointed Rick Anderson as the interim CEO.

The company said it now expects full-year organic revenue growth to be flat to up 1 percent, compared with its previous guidance for growth of 2.5 percent to 3 percent.

Convatec also lowered guidance for adjusted EBIT margin in 2018 to 23 percent from 24 percent, compared with its prior guidance of 24-25 percent, it said in a statement.

The company said the change in inventory policy by the top customer at its Infusion Devices franchise, which makes disposable infusion sets to manufacturers of insulin pumps for diabetes, is expected to have a material negative impact of between $18 million and $23 million on revenue in the fourth quarter.

It also attributed the cut in revenue guidance "challenging market dynamics in specific markets" in advanced wound care business, which makes surgical and other dressings.