SEC Filings

LivaNova Shares Jump 20% Even As Heart-Lung Unit's Profit Falls On A $34.0 Million Litigation Charge

Cardiopulmonary segment income fell to $7.6 million, but LivaNova raised its 2026 outlook.

A $34.0 million litigation charge hit LivaNova's heart-lung business; segment income was $7.6 million, down from $24.7 million. Shares still rose 20.68% to $96.42 in Wednesday trading as the company raised its 2026 guidance.

A charge that swamped strong sales

Cardiopulmonary revenue rose 10.9% to $225.3 million, with growth in every region on consumables demand, Essenz Perfusion System sales and better pricing. Segment income still fell, and the company's quarterly report blames higher litigation expense tied to its 3T Heater-Cooler device, partly offset by the added revenue.

The provision, booked in other operating expense, was $34.0 million for the quarter and $45.3 million for the first nine months. The reserve stood at $44.2 million on September 30, 2026, up from $15.6 million at the end of 2025. The company said the charge reflected developments that led it to reassess probable losses on certain outstanding claims.

The prior quarterly report showed Cardiopulmonary segment income of $28.2 million for the second quarter. Known claims fell to about 55 as of November 4, 2026, from about 60 as of August 5.

Adjusted profit up, guidance raised

Standard diluted earnings per share was $0.11, against $0.49 a year earlier. Adjusted diluted earnings per share was $1.23, up from $1.11, according to the earnings release. The standard figure was also trimmed because $28.2 million of gain on the 2029 convertible notes was removed from the diluted calculation.

Total revenue rose 9.9% to $393.1 million. LivaNova now expects full-year constant-currency revenue growth of 9% to 10%, up from 8% to 9%, and adjusted earnings per share of $4.40 to $4.50, up from $4.30 to $4.40. Its free cash flow range of $140 million to $160 million is unchanged.

Neuromodulation segment income rose 10.6% to $62.1 million on revenue up 11.1% to $166.1 million.

Italy's SNIA case still looms

The SNIA environmental case in Italy remains the largest liability on the balance sheet, at $383.6 million as of September 30, 2026. A Court of Appeal hearing meant to let the parties discuss an out-of-court resolution was moved on November 2 to February 10, 2027, from December 9, 2026, for administrative reasons. Talks continue, and the company says there is no assurance of a settlement.

In June, LivaNova paid $60.5 million to settle the ImThera milestone after the FDA approved its sleep apnea device, and in January it repaid the last $95.9 million of its term loans.

The SNIA hearing is now set for February 10, 2027.