LeMaitre Vascular Inc (NASDAQ:LMAT) released 2Q2016 earnings that the market quickly well in love with and the shares shot up. But digesting the earnings data can help you make a great investment decision regarding the stock.
What transpired in 2Q?
LeMaitre Vascular Inc (NASDAQ:LMAT) posted record sales and earnings in the June quarter and the management did not miss to point out why and that is something that this article points out below.
As for the earnings data, revenue was reported as $22.4 million, implying an increase of 13% over revenue generated in the same quarter last year. EPS was reported as $0.14, which turned out to be 40% better than EPS in the like quarter a year ago.
LeMaitre’s 2Q results also tell you that the company is seeing more rapid sales growth internationally compared to domestically. International sales rose 22% YoY, while sales in the Americas increased 7% YoY.
What fueled growth in the quarter?
Production efficiency and strong execution on the sales front played a key role in supporting the record earnings and revenue reported in the latest quarter. But a supply shortage caused by a problem facing one of LeMaitre Vascular Inc (NASDAQ:LMAT)’s competitors provided significant sales lift, especially of the product known as XenoSure.
Toward the end of June, Baxter Healthcare Corporation sent out a Safety Alert that required hospitals to stop using certain lots of its vascular patches. The Safety Alert affected hospitals abroad in places like the U.K., Italy, Germany and Korea. As a result LeMaitre saw unusual demand for its XenoSure patch. There, the Safety Alert impacting the supply of a rival product was responsible for LeMaitre’s record sales and earnings in the June quarter.
The management said that it expected sales of XenoSure to remain stronger than usual throughout the rest of 2016 because of the supply Safety Alert issued by the rival. As a result, LeMaitre Vascular Inc (NASDAQ:LMAT) sweetened sales forecast for 2016 to $88.3 million from $85.7 million previously guided.
Dividends and buybacks
On top of the record 2Q earnings, LeMaitre Vascular Inc (NASDAQ:LMAT) is also preparing to return more value to shareholders through dividends and stock repurchases. The board has approved quarterly dividend of $0.045 per share to be distributed on September 6. A buyback program of $5 million has also been approved by the board.