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.
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 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.
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.
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.
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.
Is ArthroCare the best health care stock for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average health care logistics company. Click here for instant access to this free report.
- Add ArthroCare to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.