Thoratec Corporation

Thoratec Corporation (THOR - Analyst Report) recently posted impressive second-quarter results. The stock is trading near its 52-week high and showing strength, despite terrible news slamming other biotech firms earlier this month.

Company Description

Thoratec Corporation provides cardiac support devices for use by patients with acute or chronic heart failure. Some of the products will pump blood through the heart for prolonged periods of time in the event of cardiac arrest. The company is headquartered in Pleasanton, California, employs more than 1,000 people internationally, and carries a market cap of $1.36 billion.

Revenue is Up 44% in Second Quarter

Thoratec announce second-quarter results on July 31st, which included revenue of $82.6 million or a 44% year-over-year increase. Earnings per share rose to 15 cents, easily topping the consensus estimate and last quarter's report, each were one cent per share.

The company credits the boost in earnings to a 68% year-over-year increase in sales through the Cardiovascular Division. Thoratec also operated more efficiently with a gross margin of 61.5%, up from 58.8% one year ago.

FDA Approves Use of HeartMate II

On April 21st the company announced the PreMarket Approval application for the HeartMate II LVAS has been approved by the FDA. The device is implanted alongside a patients heart and is designed to provide cardiac support in the event of heart failure. HeartMate II can pump just as much blood as a healthy heart. The HeartMate II is the first device of its kind to obtain approval for this type of use in the U.S.

Analysts are Raising Estimates

The consensus earnings estimate for the current year has increased to 37 cents per share, up from 10 cents just one month ago. In the last 30 days, each analysts reporting to Zacks on Thoratec has upped their estimates for the current quarter, next quarter, and full year for 2008 and 2009.

Industry Comparisons

The company tops the industry averages in Net Profit Margin, 4.21% compared to -1.42%. Thoratec also trumps the industry average with a Return on Equity of 3.79%, 5 times more than the average for the industry. The company is the top rated Medical Instruments company on Zacks.com and carries and Average Broker Recommendation of 1.46.

The Chart

Shares of THOR are consolidating just under the 52-week high of $25.87. The stock opened well above the resistance level at $19 after the second-quarter earnings announcement. Take a look at the chart below.

Read the full analyst report on THOR