commercial approval of the HeartMate II and favorable pump mix at the Cardiovascular Division combined with favorable manufacturing variances. This was offset by lower margins at ITC primarily related to geographic and product mix and competitive pricing pressure in our skin incision business.Guidance

• Revenues are projected to be between $285 million and $295 million. GAAP gross margins are expected to be between 58% and 59%, with non-GAAP gross margins between 59% and 60%. GAAP EPS is expected to be between $0.20 and $0.26, while non-GAAP EPS is expected to be in a range of $0.47 to $0.52.

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AP Report on Friday

• Shares of heart device maker Thoratec Corp. climbed to a two-year high Friday after the company blew past earnings expectations in the second quarter, and raised its 2008 forecasts. In February, the company projected 36 to 40 cents per share, excluding one-time charges, and $255 million to $265 million in revenue. Analysts expected 38 cents per share on $265.1 million in sales.
• Analysts had lower expectations, forecasting a profit of 9 cents per share on $64.2 million in revenue on average, according to Thomson Financial.
• The HeartMate II is designed for patients awaiting heart transplants, and is approved only as a temporary treatment. But RBC Capital Markets analyst Ryan Bachman said the larger market for the product is in "destination therapy," or patients with end-stage heart failure who are too ill for a transplant. He said the HeartMate II could be approved as a destination treatment in mid-2010.

This is quite a widely followed stock with 9 analysts covering - and they've quickly moved consensus up from 38 cents to 46 cents (it's a non GAAP world). Even at the high end of guidance of 52 cents Thoratec, post the 22% gain Friday, has become a quite expensive stock at 44x 2008 estimates. But as we know, healthcare is the new fertilizer so there is no price too high to pay for these companies. (Jul 25: NuVasive - At What Price Growth? It Seems "Any" Price) I say that a bit tongue in cheek watching companies we own growing twice as fast as Thoratec trading at 20-35% of the valuation. :)

We'll keep a name like this on the radar - since this new device was FDA approved in April it will be interesting to see how the company does next quarter. Will revenue show similar year over year growth or could they even accelerate (or decelerate for that matter?) The chart now has a big fat "gap" just north of $19 so it might be a candidate to purchase if this "hole" gets filled.