Volcano (NSDQ:VOLC) shares gained more than 7% yesterday after the medical device company reported earnings ahead of expectations on Wall Street and affirmed its outlook for the rest of the year.

San Diego-based Volcano posted losses of $2.4 million, or 4¢ per share, on sales of $101.3 million for the 3 months ended June 30, swinging to red ink compared with Q2 2012 despite a 6.3% sales increase.

But adjusted to exclude 1-time items, earnings per share were 3¢; analysts on The Street were expecting adjusted losses of 1¢ per share.

The news sent VOLC shares up 7.4% to a $22.15-per-share close yesterday. The stock was trading at $22.06 per share as of about 11 a.m. today, down 0.3%.

"Volcano experienced a solid increase in our FFR (Fractional Flow Reserve) disposables business, including 25% and 29% on a reported and constant currency basis, respectively, highlighted by growth in Europe and Japan. In addition, our IVUS (Intravascular Imaging) revenues met our expectations, driven by a greater than 25% increase in peripheral imaging revenues versus the 2nd quarter a year ago," president & CEO Scott Huennekens said in prepared remarks. "We continue to achieve market share gains and are setting the stage for future growth with initiatives such as our iFR (Instant Wave-Free Ratio) FFR technology. The launch of iFR in Europe is going very well and we just initiated our market launch in Japan. The outcomes to date from the study that will support our U.S. regulatory submissions have been encouraging. We also recently received FDA clearance for our new Verrata FFR wire, which will represent our 5th new guide wire in 5 years, and plan to initiate a full market release for Verrata later this year."

Volcano said it still expects to report sales of $394 million to $400 million this year and affirmed its guidance for net losses of 26¢-28¢ per share and adjusted EPS expected to reach 3¢-5¢.