Avanos Medical (NYSE: AVNS) saw its stock price plummet by 5.33% in pre-market trading on Tuesday, despite reporting better-than-expected second-quarter earnings. The medical technology company posted adjusted earnings per share of $0.17, surpassing analyst estimates of $0.15, and quarterly sales of $175 million, beating the consensus estimate of $165.5 million.

However, investors appeared to focus on the company's significant net loss of $76.8 million for the quarter, a stark contrast to the $4.3 million net income reported in the same period last year. The disappointing bottom line was largely attributed to a $77 million impairment charge recorded in Q2. Additionally, Avanos Medical's adjusted EBITDA from continuing operations declined to $17.0 million, down from $26.8 million in the previous year's second quarter.

In a separate announcement, Avanos Medical revealed leadership changes, appointing Scott Galovan as the new Senior Vice President and Chief Financial Officer, effective August 1, 2025. The company also added CEO David Pacitti to its board of directors. While these changes aim to strengthen the company's strategic position, they appear to have done little to assuage investor concerns in the short term, as reflected in the stock's negative performance.