ArthroCare (NSDQ:ARTC) began reaping the rewards of putting an earnings statement imbroglio behind it during the 3rd quarter, posting a whopping 478% profit surge.
The Austin, Texas-based medical device company posted profits of $9.1 million, or 27¢ per share, on sales of $86.9 million during the 3 months ended Sept. 30. That represents a 4.4% increase in sales and 477.9% bottom-line growth.
The major impact on the bottom line came from a $6.3 million reduction in operating expenses related to lower "investigation and restatement-related costs," the company said.
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A pair of former ArthroCare executives, John Raffle and David Applegate, are accused of inflating the company’s earnings by 10s of millions of dollars through sham transactions with distributors from around December 2005 to December 2008. The scandal forced ArthroCare to restate its financials for those years, and has been a drag on profits ever since the scandal broke in 2008.
The news sent ARTC shares up 6.4% today to a $31.99 close on Wall Street.
