Why CryoLife Inc. Jumped Higher

By Brian Orelli Markets Fool.com

What happened

Continue Reading Below

CryoLife (NYSE: CRY) is up 10.5% at 12:37 p.m. EDT after announcing solid first-quarter earnings.

So what

Revenue increased 5% year over year in the first quarter, which was driven by growth in sales of the On-X aortic heart valve and tissue products. CryoLife has made a strategic decision to focus on certain markets, so revenue was hurt by the absence of sales of its HeRO and ProCol products, which it sold off last year, and a decrease in TMR revenues, but the strategy seems to be paying off.

Adjusted earnings were flat year over year at $3.2 million in the first quarter of this year and last, although there are more shares outstanding now, so on a per-share basis, adjusted earnings fell $0.01 to $0.09 per share. The year-over-year increase in revenue didn't fall to the bottom line because CryoLife spent more on research and development than it did in the year-ago quarter, which is an investment in the future.

Image source: Getty Images.

Continue Reading Below

Now what

Management reiterated its guidance for the year with expectations for adjusted product revenue and tissue processing revenue to both produce year-over-year grow in the mid-single digits. Adjusted earnings per share are expected to be in the $0.40 to $0.43 range, so management is predicting that earnings will pick up a little as the year progresses.

Investors will get a look at how well On-X might be able to drive CroyLife's sales higher next month at the American Association for Thoracic Surgery meeting, where the company's academic collaborator will present data from the PROACTclinical trial.

10 stocks we like better than CryoLife
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and CryoLife wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of April 3, 2017

Brian Orelli and The Motley Fool have no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.