Volcano Corp. Crushes Estimates

Seth Jayson, The Motley Fool
Updated

Volcano Corp. (NAS: VOLC) reported earnings on Feb. 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Volcano met expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.

Margins expanded across the board.

Revenue details
Volcano chalked up revenue of $92.7 million. The 13 analysts polled by S&P Capital IQ expected sales of $92.8 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $81.2 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.14. The 11 earnings estimates compiled by S&P Capital IQ predicted $0.05 per share on the same basis. GAAP EPS were $0.54 for Q4 against -$0.03 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 67.3%, 320 basis points better than the prior-year quarter. Operating margin was 9.4%, 560 basis points better than the prior-year quarter. Net margin was 31.7%, 3,380 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $92.2 million. On the bottom line, the average EPS estimate is $0.00.

Next year's average estimate for revenue is $398.0 million. The average EPS estimate is $0.23.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 172 members out of 192 rating the stock outperform, and 20 members rating it underperform. Among 55 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 49 give Volcano a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Volcano is outperform, with an average price target of $29.95.

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At the time thisarticle was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Volcano. 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.

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