Why Align Technology Inc Shareholders Are Smiling From Ear to Ear Today

What: Shares of Align Technology (NASDAQ: ALGN), the maker of the invisalign dental system, were up more than 10% in early morning trading today after the company reported third quarter results that gave its investors a reason to smile.

So what: The company reported that it shipped more than 147,500 units of its Invisalign System during the quarter, which was up 23% over the year-ago period. This result was driven by an 18% increase in sales in North America and a strong 35% growth rate from its international business.

In total, the company reported revenue of $207 million for the period, up 9.4% year-over-year, while net income for the quarter actually fell to just over $27 million or earnings-per-share of $0.34. Both revenue and earnings managed to beat analysts' expectations for the quarter, which were $205 million and $0.31, respectively.

The main reason for the disparity between the strong unit volume growth and the tepid revenue and profit results appear to be caused by the company's policy change related to shipping additional alignersthat went into effect on July 18th, 2015. At that time the company announced that it would no longer distinguish between mid-course corrections and case refinements, which provides its doctors with the ability to order additional aligners at no charge. The company noted that while the change did not produce a material change in its cash flow it does influence its ability to recognize revenue.

Wall Street appears to have taken the long-view on that decision, and bid up shares as a result.

Now what: The company expects the good times to continue to roll as well, projecting that fourth quarter shipments will be inthe154,900 to 157,400 range, which would represent growth of approximately 22% to 24% over the same period a year-ago. That should be good enough to produce revenue between $223.0 millionto$227.9 million and earnings-per-share of$0.50to$0.53.

Those numbers compare favorably to the $227 million in revenue and $0.47 in earnings-per-share that Wall Street is currently expecting, which is probably another reason that the stock is flying higher today.

Given the great reported results and the company's guidance, its certainly understandable why shares are moving higher today, and with the stock only trading around 21 times projected 2016 earnings estimates, it might be a good time to add this proven winner to your portfolio.

The article Why Align Technology Inc Shareholders Are Smiling From Ear to Ear Today originally appeared on Fool.com.

Brian Feroldi has no position in any stocks mentioned. The Motley Fool recommends Align Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.