ArthroCare (NSDQ:ARTC) missed Wall Street’s forecast for its 3rd-quarter earnings, sending share prices down nearly 3% this week.
ArthroCare posted profits of $11.4 million, or 27¢ per share, on sales of $91.9 million for the 3 months ended Sept. 30. That’s a profit gain of 4.3% on sales growth of 5.7% compared with the same period last year.
The results put the Austin, Texas-based company well behind Wall Street’s 40¢ expectation for earnings per share.
ARTC shares gained 1.0% on the news, rising to a $37.97 close Oct. 30, the day following the earnings release. The stock was trading at $36.87 per share as of about 1:30 p.m. today, down 1.5% on the day and nearly 3% since Oct. 30.
“We started the year with an overall revenue growth outlook of between 2% and 4.5%. During last quarter’s update, we advised you we thought the year would come in at the lower end of our range and as a results of uncertainties concerning the timing of new product introductions in the second half of this year. These uncertainties remain, and we continue to anticipate that revenue growth will be at the lower end of our 2% to 4.5% range. At this point, we have achieved growth of 1.8% during the first nine months of 2013 and just under 2% on a constant currency basis,” ArthroCare president & CEO David Fitzgerald told analysts during a conference call.
During the 2nd quarter, ArthroCare set aside $30 million to cover the outcome of ongoing negotiations with the U.S. Justice Dept. over an alleged scheme to commit stock fraud. Fitzgerald said that is still the company’s best guess as to the cost of any agreement with the DoJ.
"We are continuing to have discussions with them, and our expectations are sometime in the next couple of months, hopefully," he said during the call. "But we are not sure when this is going to happen. I do not want to be optimistic, and it remains as we said. We are in discussions with them."