Why the Compumedics share price is crashing 22% lower on Monday

The Compumedics Limited (ASX:CMP) share price is crashing lower after the release of a disappointing update this morning…

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The Compumedics Limited (ASX: CMP) share price is crashing lower on Monday.

At the time of writing the medical device company's shares are down 22% to 61 cents.

Why is the Compumedics shares price sinking lower?

Investors have been selling Compumedics' share on Monday after the release of a business update.

According to the release, the company has experienced a delay in some sales orders being received in the United States.

As a result, its revenue in the first half is expected to be $17.7 million. This is a decline of 5.3% on the prior corresponding period's $18.7 million.

Things were better in Asia, the Middle East, and Germany, though. Management revealed that it achieved sales growth in all three markets during the half.

Management revealed that it is confident the sales order delays in the United States are a timing issue at this point and have not been lost.

In light of this, it has reaffirmed its full year guidance. It expects revenues between $42 million and $44 million and EBITDA between $6.5 million and $7.5 million in FY 2020.

Another positive is the progress of its first MEG sale to Barrow Neurological Institute (BNI). According to the release, the 2nd and final phase of the installation of the MEG system are due in the coming months.

The company has also continued to progress the FDA submission for the current MEG device installed at BNI and is pursuing the 2nd and 3rd potential MEG sales from its current list of opportunities.

What is Compumedics?

Compumedics is a medical device company that develops, manufactures and commercialises diagnostics technology for the sleep, brain and ultrasonic blood-flow monitoring applications.

It owns United States based Neuroscan and Germany based DWL Elektronishe GmbH. It also has a broad international reach, including the Americas, Australia and Asia Pacific, Europe, and the Middle East.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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