Thoratec Corp. (THOR) recently swung into profitability from last year, reporting strong third-quarter results that were fueled by the release of a product that was approved by regulators for sale in April. Estimates are on the move and so is Thoratec’s share price.

Company Description

Thoratec Corporation provides cardiac support devices for use by patients with acute or chronic heart failure. The company is headquartered in Pleasanton, California, employs more than 1,000 people internationally, and carries a market cap of $1.36 billion.

Industry Trend

The healthcare and medical devices segments of the market have weathered the recent economic volatility better than many of their peers, carrying the benefit of less elastic demand. This dynamic was evident when Thoratec posted strong third-quarter results on Oct 31.

Third-Quarter Results

Revenue was up 44% from last year to $80.8 million. Net income came in at $7.2 million, up from a loss of $1.4 million in the same period last year. This produced earnings of 13 cents per share, ahead of estimates by 6 cents.

Thoratec handily beat analyst estimates last quarter as well, posting earnings of 15 cents against the expected 1 penny.

Segment Performance

Thoratec noted that sales in its cardiovascular division rose substantially, climbing 68% to $56.1 million.

Guidance and Estimates

After the solid quarter, Thoratec went ahead and raised its 2008 revenue and earnings projections. The company now expects adjusted earnings between 54 and 59 cents per share, ahead of the previous range between 47 and 52 cents. Analysts are a little more bullish, projecting earnings of 53 cents, a 15.5% earnings growth projection.

The Chart

Shares of THOR have been steadily climbing for most of 2008 after bottoming out below $13 in March. More recently, this stock bounced from $18.50 to the recent high just above $25. Take a look at the chart below.

Content Courtesy: Zacks Investment Research

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