Why AtriCure Inc. Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of AtriCure (NASDAQ: ATRC  ) , a global medical device company that focuses on providing cardiac surgical ablation systems, jumped as much as 14% after reporting better-than-expected third-quarter results and boosting its full-year forecast.

So what: For the quarter, AtriCure delivered a 24.8% increase in revenue to $20.1 million -- $15.8 million of that coming from the U.S. -- as its adjusted loss per share narrowed to $0.13 from $0.16 in the year-ago period. Gross margin also improved by 130 basis points to 72.9%. Comparatively speaking, Wall Street had been forecasting just $18.1 million in revenue and a loss of $0.16 per share. Looking ahead, AtriCure's management boosted its full-year revenue guidance higher to $80 million from a previous outlook of $77 million to $78.5 million and is projecting adjusted EBITDA losses of $4.5 million to $5.5 million including the negative impact of the medical device excise tax.

Now what: Unfortunately, I'm witnessing more and more instances recently of very intriguing companies on paper that are still years away from producing profitable results. AtriCure certainly has a diverse product lineup that could definitely benefit from further international exposure, but it's likely two years or more away from achieving breakeven results. Until I see discernible improvement in AtriCure's bottom line, I plan on remaining nothing more than a spectator.

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