NuVasive, Inc. (NUVA), Medtronic, Inc. (MDT) & Three Earnings Reports That Caught My Attention Last Week

As we enter the heart of second-quarter earnings reports, I can’t help but point out that the majority we’ve covered over the past year have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it’s easy for some earnings reports to fall through the cracks.

Each week for the past year, I’ve taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we’ll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Company Consensus EPS Reported EPS Surprise
NuVasive (NASDAQ:NUVA) $0.22 $0.26 18%
FLY Leasing (NYSE:FLY) $0.76 $1.15 51%
FreightCar America (NASDAQ:RAIL) $0.06 ($0.18) (400%)

Source: Yahoo! Finance.

NuVasive, Inc. (NASDAQ:NUVA), a surgical device company that makes spinal implants, reported Street-topping results yet again last Tuesday. Having topped estimates by an average of 27% over the last four quarters, NuVasive, Inc. (NASDAQ:NUVA) delivered 5% sales growth and a higher gross profit despite a small 20-basis-point drop in gross margin to 75.5%.

However, the fact that the company topped estimates yet again wasn’t what interested me; nor was it the fact that it stuck to its full-year adjusted EPS forecast of $1. The interesting tidbit in NuVasive, Inc. (NASDAQ:NUVA)’s report was that its expenses ticked higher due to “international infrastructure expansion” as its earnings report states.

If you recall, NuVasive, Inc. (NASDAQ:NUVA)’s CEO, Alex Lukianov, took out an op-ed in the San Diego Union Tribune in June of last year to describe the negative impact that the Patient Protection and Affordable Care Act, also known as Obamacare, was going to have on his company’s bottom line. Specifically, Lukianov noted that with 100% of its R&D and 90% of its manufacturing done in the U.S., it was going to face shrinking margins. This report signals very clearly that NuVasive, Inc. (NASDAQ:NUVA) is beginning to move more aspects of its manufacturing and perhaps R&D overseas.

This wouldn’t actually be surprising, as Medtronic, Inc. (NYSE:MDT), another large medical-device maker that specializes in spinal implants, announced last year that it’d be hiring up to 1,500 people, but noted that the majority of these hires would be overseas. Overseas markets certainly supply cheaper labor potential, but they also offer friendlier tax environments. As NuVasive expands its global presence, expect its profits to improve.