Medical Action Industries Earnings: Here’s Why the Stock is Skyrocketing Now

Medical Action Industries Inc. (NASDAQ:MDCI) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 12.8%.

Markets are at 5-year highs! Discover the best stocks to own. Click here for our fresh Feature Stock Pick now!

Medical Action Industries Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 400% to $0.10 in the quarter versus EPS of $0.11 in the year-earlier quarter.

Revenue: Decreased 3.51% to $109 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Medical Action Industries Inc. reported adjusted EPS income of $0.10 per share. By that measure, the company beat the mean analyst estimate of $0.05. It missed the average revenue estimate of $115.19 million.

Quoting Management: Paul D. Meringolo, Chief Executive Officer and President said, “We have made significant improvements in our gross profit culminating with the $19.1 million reported during the third quarter, which is the highest quarterly amount in the Company’s thirty-six year history. This improvement in gross profit is the result of management’s cost savings initiatives, elimination of unprofitable sales, as well as a reduction in raw material costs. Since June 2012, when the Company was realigned into strategic business units, management’s focus on targeted markets has improved considerably and the action plans centered on improving profit and containing costs have yielded the year over year and sequential gross profit improvements we are reporting today. We have been able to make these impressive strides by improving upon our internal operations and management effectiveness without compromising our focus on delivering exceptional service and value to our customers. We still have challenges and opportunities ahead of us and I am extremely pleased at the success we have had in the last several months as we have refocused the Company. Finally, I am excited about the opportunity to work with our interim Chief Operating Officer, Paul Chapman, on continuing to drive improvements in profit and cost containment.”

Key Stats (on next page)…

Revenue decreased 2.77% from $112.1 million in the previous quarter. EPS increased 400% from $0.02 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.05 to a profit $0.06. For the current year, the average estimate has moved up from a profit of $0.09 to a profit of $0.13 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)