Mentor Shares Fall 33% on 1st-Quarter Profit Warning

Mentor Corp. shares fell as much as 33% after the maker of saline breast implants warned its fiscal first-quarter profit will be lower than expected.

Mentor shares fell $5.38 to close at $22.63 on Nasdaq after trading as low as $18.75. At least five analysts downgraded the stock Friday.

Mentor said Thursday that first-quarter profit is likely to be between 32 cents and 34 cents per share, compared with analysts’ expectations of 37 cents, after sales of cosmetic surgery products fell short.

The Santa Barbara-based company said that “promotional efforts during the quarter by Mentor’s chief competitor” and overstocking by doctors in the previous quarter probably led to lower-than-expected sales of those products in April, May and June, which is the company’s fiscal first quarter.

Analysts have said breast implants make up more than half Mentor’s sales. Mentor competes with Inamed Corp. in the market for saline breast implants. They are the only companies approved by the Food and Drug Administration to sell saline breast implants.

Inamed shares fell $2.50 to close at $34.38 on Nasdaq. The company said it will report second-quarter earnings July 25.

Mentor said Thursday that sales rose 11% to about $67 million in its first quarter, about 5% less than expected.

Mentor also makes catheters, impotence products and cancer diagnosis and treatment products.