The 10-second takeaway
For the quarter ended March 31 (Q1), ArthroCare missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly. Non-GAAP earnings per share stayed the same. GAAP earnings per share dropped significantly.
Margins shrank across the board.
ArthroCare reported revenue of $92.3 million. The eight analysts polled by S&P Capital IQ expected to see sales of $94.3 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.46. The eight earnings estimates compiled by S&P Capital IQ predicted $0.37 per share. Non-GAAP EPS of $0.46 were the same as the prior-year quarter. GAAP EPS of $0.30 for Q1 were 17% lower than the prior-year quarter's $0.36 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 69.3%, 200 basis points worse than the prior-year quarter. Operating margin was 14.6%, 430 basis points worse than the prior-year quarter. Net margin was 12.1%, 190 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $93.9 million. On the bottom line, the average EPS estimate is $0.34.
Next year's average estimate for revenue is $379.7 million. The average EPS estimate is $1.42.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 132 members out of 265 rating the stock outperform, and 133 members rating it underperform. Among 91 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 38 give ArthroCare a green thumbs-up, and 53 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ArthroCare is outperform, with an average price target of $39.50.
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