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What: Shares of Natus Medical (NASDAQ:BABY), an aptly tickered provider of neurodiagnostic and newborn baby products, surged as much as 10% after reporting its fourth-quarter earnings results.
So what: For the quarter, Natus reported that revenue improved 41% over the previous year to $90.5 million as adjusted EPS advanced to $0.29. While sales came up about $3 million below expectations, EPS surpassed the Street's consensus estimate by $0.03. CEO Jim Hawkins noted that organic revenue grew 2.3% for the year-over-year period, but overall results were hampered by order delays and order weakness in overseas markets. Looking ahead, Natus is forecasting $362 million to $367 million in revenue and EPS of $0.81-$0.84 for fiscal 2013. Current estimates had called for $359 million in revenue and $0.82 in EPS.
Now what: All told, this was a pretty solid quarter for Natus despite the international market weakness. However, I would point out that you shouldn't get too excited about these results because, as Hawkins said, organic growth totaled just 2.3% this quarter. Natus is doing a good job of managing costs to maximize profits, but it'll need market demand abroad to strengthen if it hopes to get much beyond its current valuation.
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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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