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Mindray Medical (NYSE: MR) reported that its Q3 revenues rose 18% to $257 million, with non-GAAP net income up an equal 18% at $50 million. Unfortunately, those results were below analysts' estimates. Also, a $10 million charge took EBITDA and net income lower than the prior year's similar period. The charge derives from a pricing dispute with a supplier over costs for components of patient monitors sold in the US.

After the charge, EBITDA fell only slightly from the prior year's quarter, though net income dropped 4% to $35.8 million. In the call with analysts, Mindray executives said they could not discuss the matter publicly because it remains in negotiations. They also refused to say whether or not the problem would affect future results.

Consensus estimates for Q3 were $266 million, about 4% higher than the $257 million actual number. Similarly, analysts predicted that Mindray would report EPS of $0.45, but the number was down 3 cents from that.

According to the company, China sales were the big driver in the period. Sales growth in China rose 26% to $117.7 million. International sales were up a less-impressive 12% at $139.4 million. US sales remain only so-so; the largest contributor to international sales was emerging markets, said Mindray.

Another bright spot in Mindray's report were revenues from its In-vitro Diagnostic sector. They grew 30% year-over-year to $72.6 million during the quarter.

Because of the negative surprises, Mindray dropped $2.65 to $31.90 in the ensuing trading session, a 7.7% one-day decline.

Disclosure: none.

Source: Mindray Medical's Q3 Financial Report Disappoints