NuVasive, Inc. NUVA reported first-quarter 2016 adjusted earnings per share (EPS) of 32 cents, reflecting a 6.7% rise from the year-ago quarter and an 18.5% beat over the Zacks Consensus Estimate. Solid revenue growth and an improved operating margin performance primarily led to the year-over-year earnings improvement. Including one-time items, the company reported first-quarter 2016 net loss per share of 18 cents while in the year-ago quarter it had recorded earnings of 61 cents per share. Revenues in the reported quarter increased 11.8% year over year to $215.1 million (up 12.3% at constant exchange rate or CER), edging past the Zacks Consensus Estimate of $205 million. The upside was driven by healthy performance in NuVasive's core U.S. spinal hardware business which improved 11.6% on the back of the continued adoption of ReLine posterior fixation system, along with ongoing uptake of iGA, surgical planning technology which pulls through spinal hardware. NuVasive’s International business grew 16% year over year (up 20.7% at CER). Growth was significantly backed by strong contributions from core direct markets including Japan, Australia, New Zealand, the U.K., Italy and Germany. The company reported a 147 basis points (bps) contraction in gross margin to 74.8% in the first quarter with an 18.8% increase in cost of goods sold. Sales, marketing and administrative expenses went up 12.1% to $130.2 million, while research and development expenses increased 14.7% to $10.6 million. NuVasive posted adjusted operating income of $20.1 million in the reported quarter, reflecting a massive 6.1% increase from the year-ago number. Adjusted operating margin contracted 178 bps to 9.3% in the reported quarter. Outlook Following NuVasive’s acquisition of Ellipse Technologies and Mega Surgical, its new convertible notes issuance and existing convertible notes repurchases, as well as expected changes in foreign currency rates, the company provided an update on its full-year 2016 guidance. The company expects 2016 revenues of approximately $928 million (an increase from the earlier quoted guidance of $923 million), up 14.4% (13.8%) from 2015, which includes approximately $53 million of revenue contribution from Ellipse Technologies. The current Zacks Consensus Estimate of $924 million remains below the expectation. NuVasive has also provided its estimate for full-year 2016 adjusted earnings per diluted share at $1.48 (unchanged), up approximately 12.7% from the 2015 EPS number. The current Zacks Consensus Estimate of $1.49 is a penny ahead of the company’s guidance. Additionally, adjusted operating margin for the year is projected at 15.8% (unchanged), up 40 bps on a year-over-year basis. Our Take NuVasive performed well in the first quarter of 2016 with both earnings and revenues steering past the Zacks Consensus Estimate. Post a disruptive sales performance in the international market in fourth-quarter 2015, the first quarter witnessed strong international performance on the back of exceptional constant currency performance in both the Asia-Pacific and EMEA. According to management, there is tremendous growth opportunity for NuVasive overseas, given that it currently holds a mere 4% of the total market share therein. NuVasive, at present, is rapidly developing technologies and services for spine surgery, expanding its global footprint in the existing and new markets, and building itself as a commercial powerhouse with integrated sales, service and specialized customer marketing programs. To this end, the company recently acquired privately held Ellipse Technologies that works on the transformation of procedural solutions for complex skeletal deformity. According to the company, the inclusion of Ellipse products in its portfolio will drive revenue growth at multiples to the market growth, targeting an approximately 14% improvement over 2015. In addition, the company’s acquisition of Brazilian distributor, Mega Surgical will contribute to its growth in 2016 and beyond. The stock currently carries a Zacks Rank #2 (Buy). Key Picks from the Sector Some other well-ranked medical product stocks are Boston Scientific Corporation BSX, Cardiovascular Systems Inc. CSII and St. Jude Medical Inc. STJ. All the three stocks carry a Zacks Rank #2. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BOSTON SCIENTIF (BSX): Free Stock Analysis Report ST JUDE MEDICAL (STJ): Free Stock Analysis Report NUVASIVE INC (NUVA): Free Stock Analysis Report CARDIOVASCLR SY (CSII): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research