ArthroCare Beats Up on Analysts Yet Again

Just the facts, Fool.

Seth Jayson
Seth Jayson
Feb 14, 2013 at 12:00AM
Other

ArthroCare (Nasdaq: ARTC) reported earnings on Feb. 13. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), ArthroCare beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased and GAAP earnings per share grew.

Margins grew across the board.

Revenue details
ArthroCare reported revenue of $96.9 million. The nine analysts polled by S&P Capital IQ hoped for a top line of $93.9 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 details
EPS came in at $0.53. The eight earnings estimates compiled by S&P Capital IQ predicted $0.37 per share. GAAP EPS were $0.30 for Q4 versus -$0.91 per share for the prior-year quarter.

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 71.4%, 30 basis points better than the prior-year quarter. Operating margin was 15.6%, 6,390 basis points better than the prior-year quarter. Net margin was 11.5%, 4,220 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $95.2 million. On the bottom line, the average EPS estimate is $0.37.

Next year's average estimate for revenue is $377.4 million. The average EPS estimate is $1.46.

Investor sentiment
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 97 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give ArthroCare a green thumbs-up, and 57 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 $36.63.

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