Investing

Invisalign maker warns of slowdown in China, shares plummet 27%

Key Points
  • Align Technology CEO Joe Hogan says that second-quarter Invisalign shipments were lower than expected, "primarily due to a softness in China related to a tougher consumer environment."
  • The company shipped 377,100 Invisalign cases last quarter. Wall Street expected Align to ship 382,900 cases, according to FactSet. 
  • "Given the uncertainty in China, our outlook for the third quarter reflects a more cautious view for growth in the Asia Pacific region," Hogan says.
An orthodontist uses a process called invisalign to straighten a patients teeth.
Sammy Dallal | Digital First Media | Getty Images

Shares of Align Technology, the company that makes Invisalign clear teeth aligners, plunged Thursday on the back of a dire warning about China and weaker-than-expected results.

Align Technology CEO 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 shipped 377,100 Invisalign cases last quarter. Wall Street expected 382,900 cases, according to FactSet. Align shares dropped 27% on Thursday.

"Given the uncertainty in China, our outlook for the third quarter reflects a more cautious view for growth in the Asia Pacific region," Hogan said. Align expects third-quarter earnings to range from $1.09 to $1.16 per share. Analysts polled by FactSet expected a median guidance of $1.45 per share.

On top of that, Align's second-quarter earnings fell short of expectations. The company earned $1.33 per share, well below a Refinitiv estimate of $1.51.

Hogan's warning and the company's weaker-than-expected results come as China and the U.S. negotiate to end a trade war that's been going on for more than a year. A U.S. delegation is scheduled to fly to China next week for further talks.

Hogan will be on CNBC's "Mad Money" Thursday evening to give more details on the China slowdown.

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