ArthroCare
The 10-second takeaway
For the quarter ended Sep. 30 (Q3), ArthroCare beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share expanded significantly.
Margins expanded across the board.
Revenue details
ArthroCare recorded revenue of $86.9 million. The nine analysts polled by S&P Capital IQ looked for a top line of $84.6 million on the same basis. GAAP reported sales were 4.4% higher than the prior-year quarter's $83.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS details
EPS came in at $0.38. The nine earnings estimates compiled by S&P Capital IQ predicted $0.28 per share. GAAP EPS of $0.27 for Q3 were much higher than the prior-year quarter's $0.02 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
Margin details
For the quarter, gross margin was 69.9%, 60 basis points better than the prior-year quarter. Operating margin was 15.7%, 710 basis points better than the prior-year quarter. Net margin was 11.5%, 860 basis points better than the prior-year quarter.
Looking ahead
Next quarter's average estimate for revenue is $93.7 million. On the bottom line, the average EPS estimate is $0.36.
Next year's average estimate for revenue is $363.0 million. The average EPS estimate is $1.37.
Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 133 members out of 269 rating the stock outperform, and 136 members rating it underperform. Among 100 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 39 give ArthroCare a green thumbs-up, and 61 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 $34.29.
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