) posted adjusted earnings of $26.0 million or 44 cents per share
for the third quarter of the year, surpassing the Zacks Consensus
Estimate of 29 cents. However, adjusted earnings fell 3.2% from
$26.9 million or 2.2% from 45 cents in the comparable quarter a
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THORATEC CORP (THOR): Free Stock Analysis
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Reported earnings per share decreased about 22.0% to $18.9
million or 32 cents in the quarter from $24.3 million or 41 cents
in the 2012-quarter.
Adjusted earnings excluded amortization of purchased intangibles,
acquisition-related contingent consideration adjustments and
acquisition-related transaction costs in the 2013 quarter, and
amortization of purchased intangibles and Levitronix Medical FMV
inventory adjustments in the 2012 quarter.
Revenues in the quarter rose 7.4% to $126.4 million, exceeding
the Zacks Consensus Estimate of $121.0 million. Thanks to the
company's HeartMate product line that contributed $112.8 million
to overall revenues, reflecting a 7% year-over-year increase due
to the expansion of its international business and the launch of
Revenues from CentriMag product line surged 38.7% to $10.4
million but the same from PVADTM and IVADTM product line plunged
31.6% to $2.6 million in the quarter.
Gross income rose 4.4% to $87.2 million from $83.6 million a year
ago. Nevertheless, adjusted gross margin declined 200 basis
points (bps) to 69.0% from 71.0% in the third quarter of 2012.
The decrease was attributable to costs associated with the
introduction of the Pocket Controller and the impact of the U.S.
medical device excise tax.
Adjusted operating income went down 16.7% to $29.5 million from
$35.4 million a year ago. However, adjusted operating margin fell
670 bps to 23.3% from 30.0% in the third quarter of 2012.
Thoratec Corporation had cash and investments of $283.0 million
as of Sep 28, 2013, up from $270.9 million as of Jun 29, 2013,
and $260.4 million as of Dec 29, 2012. During the quarter under
study, the company utilized $40.0 million in cash to finance
THOR narrowed its fiscal 2013 revenue guidance to a range of
$500-$505 million from the previous range of $490-$510 million.
The current Zacks Consensus Estimate of $501 million falls within
the guided range.
However, the company raised its non-adjusted earnings per share
guidance to a range of $1.30 to $1.35 from the earlier range of
$1.23-$1.33. The revised guidance includes approximately 5 cents
of incremental expense related to increase in future
acquisition-related milestone payments.
Thoratec Corporation develops, manufactures and markets
proprietary medical devices used for circulatory support,
vascular graft, blood coagulation and skin incision applications.
The company currently markets the Thoratec Ventricular Assist
Device System (called Thoratec VAD System or VAD System) and the
HeartMate Left Ventricular Assist System (called HeartMate LVAS)
in the U.S. and internationally for use as a bridge to heart
transplant. THOR has also developed small diameter vascular
grafts for use in hemodialysis access and coronary artery bypass
surgery. Currently, it retains a Zacks Rank #4 (Sell).
While we avoid THOR, stocks that are currently performing well in
the medical instruments industry include
Natus Medical Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).