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Thoratec 3Q Net Nearly Doubles; Full-Year Guidance Raised

By Jon Kamp, Of DOW JONES NEWSWIRES

Thoratec Corp.'s (THOR) third-quarter earnings nearly doubled as the company continued to increase sales of its pumping device for patients awaiting heart transplants and looked ahead to gaining entry into a bigger market.

Thoratec continues to expect Food and Drug Administration approval in early 2010 to use its "HeartMate II" device for so-called destination therapy - for patients who need permanent help - but it's possible approval could come by the end of this year, Chief Executive Gary Burbach said on a conference call late Wednesday. The FDA recently said it won't use a panel of outside experts as part of the review process, the company announced.

Sales in the third quarter were slightly lower than Wall Street expected, which Burbach chalked up to a typical summer slowdown, but the company raised the low end of its full-year sales guidance and hiked its earnings outlook.

Shares rose in after-hours trading and were recently up 10.2% to $29.74 following a 1% decline during regular trading hours Wednesday.

Thoratec reported earnings of $11.8 million in the quarter ended Oct. 3, or 20 cents per share, up from $6.1 million, or 11 cents a share, a year ago. Excluding one-time items, the company said earnings rose to 22 cents from 17 cents.

Analysts surveyed by Thomson Reuters had projected, on average, earnings of 19 cents per share.

Sales of $87.9 million rose 8.8% but missed Wall Street's $88.4 million target.

"We're actually quite pleased with the results we saw in the quarter given what we would expect to see in the summer," Burbach said on the call.

This quarter represented the first in which Thoratec matched up against a full quarter of HeartMate II sales a year ago for patients awaiting transplants.

Wall Street is currently focused on the destination therapy market, in which heart-failure patients who aren't transplant candidates are treated, because it's expected to be much bigger. The company plans to present key study data regarding destination therapy at an American Heart Association conference in two weeks.

Sales in Thoratec's cardiovascular business, which includes HeartMate II, rose 14% in the recent quarter. Revenue in the International Technidyne unit, which makes blood-testing systems, slipped due to the downturn in hospital capital- equipment spending and competitive pressure, Thoratec said.

Looking ahead, the company tightened its full-year sales guidance to a range of $360 million to $365 million - the lower end was raised by $5 million from the projection in August.

The full-year earnings forecast was raised to a range of 41 cents to 46 cents a share from a prior 31 cents to 37 cents forecasts. Excluding items, the company now sees earnings of 80 cents to 84 cents, which compares with its prior 76 cents to 81 cents forecast.

- By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

  (END) Dow Jones Newswires
  11-04-091826ET
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