NuVasive Earnings: Double Digit Revenue Growth

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Rising costs hurt NuVasive, Inc. (NASDAQ:NUVA) in the second quarter as profit dropped from a year earlier. NuVasive is a medical device company focused on the design, development, and marketing of products for the surgical treatment of spine disorders.

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NuVasive, Inc. Earnings Cheat Sheet

Results: Net income for NuVasive, Inc. fell to $2.9 million (6 cents per share) vs. $5.4 million (13 cents per share) a year earlier. This is a decline of 46.8% from the year-earlier quarter.

Revenue: Rose 16.1% to $154.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: NuVasive, Inc. fell short of the mean analyst estimate of 12 cents per share. Analysts were expecting revenue of $154.2 million.

Quoting Management: Alex Lukianov, Chairman and Chief Executive Officer, said, “Our financial performance in the second quarter and first half of 2012 attests to excellent execution of our market-share taking strategy, and gives us confidence to raise our full year revenue and profitability guidance. We made strong improvements in profitability and will continue to balance the necessary investments into NuVasive’s differentiation and share taking strategy. Looking forward, we expect our top line to grow in conjunction with an improving profitability profile and continual improvements in free cash flow. We are laying the groundwork today to become the #3 spine company in the world.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 15.2%, with the biggest boost coming in the first quarter when revenue rose 21.9% from the year earlier quarter.

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 4.5 percentage points to 76.3% from the year-earlier quarter. In that span, margins have contracted an average of four percentage points per quarter on a year-over-year basis.

The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 4 cents, and in the fourth quarter of the last fiscal year, it was ahead by 4 cents.

Looking Forward: Expectations for the third quarter have not changed from 12 cents. For the fiscal year, the average estimate has moved up from 47 cents a share to 52 cents over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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