Teaching-device maker LeapFrog ( LF) posted sharply higher earnings in the third quarter as margin improvement amplified 5% sales growth.

LeapFrog earned $32.8 million, or 52 cents a share, in the quarter, up 62% from $20.2 million, or 33 cents a share, a year ago. Sales were $242.8 million compared with $231.1 million a year ago. Analysts were forecasting earnings of 40 cents a share on sales of $246.6 million in the latest period.

The company's gross margin rose 4.3 percentage points from a year ago to 44.8%, reflecting improved product mix and logistics, it said. LeapFrog resolved "many supply chain issues" and has been delivering new products on time to a strong reception.

"With the success of our Leapster handheld product, the introduction of our Leapster L-MAX handheld and shipments of our FLY pentop computer, our U.S. consumer business experienced good growth," it said. "Our International and SchoolHouse businesses experienced sales declines this quarter but we are confident of the long-term growth of both these segments."

Shares closed at $13.60 Thursday, about 31 times next year's Thomson First Call earnings consensus of 44 cents a share.

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