What's happening: Shares in NuVasive (NUVA) soared higher by 10% earlier today after the company reported better-than-expected second-quarter financial results yesterday.
Why it's happening: Sales of NuVasive's minimally invasive spinal surgery products grew 6.4% year-over-year to nearly $203 million and earnings per share, or EPS, expanded 322% to $0.20 in the second quarter. After adjusting for the effects of currency translation, sales were up 8.5% versus last year and non-GAAP EPS totaled $0.31, up from $0.15 versus a year ago, which was 24% better than analysts were projecting.
Rising demand for its spine products and market share gains against competitors have NuVasive forecasting that full year sales will reach $810 million, up 6.2%, including the effects of currency conversion.
The company also thinks that its GAAP EPS and non-GAAP EPS will hit $1.18 and $1.17, respectively. NuVasive's non-GAAP EPS guidance is up from prior expectations of $1.10 and if the company can deliver on that forecast, it would represent earnings growth of 74.2% from 2014.
In addition to posting solid results, NuVasive also announced that the final amount it will pay to the Department of Justice to settle alleged false or improper claims is less than feared. The settlement clears the way for the company to focus more attention on growth than its legal challenges.
Because NuVasive is the third-largest player in a market valued at $9 billion annually, there appears to be plenty of room left for growth. The opportunity for ongoing sales upside and the fact that this company is likely to report significant profit growth in the coming year suggests that this is one company that may be worth adding to your watch list.
