Shares of Goleta-based Inogen soared 11.4 percent to $16.29 on May 14 after reporting stronger-than-expected profits and boosting its sales outlook for the year.

The maker of portable oxygen therapy systems said May 13 it expects sales of $92 million to $96 million this year, up from a previous estimate of $90 million to $94 million. Profits for the first quarter were $900,000, or about 5 cents per share, beating Wall Street’s expectations of 4 cents per share. First-quarter sales were $23.6 million, a more than 50 percent increase from the year before.

“We are pleased with our unseasonably strong first quarter performance, which included the highest quarterly revenue we have ever recorded, and we are well positioned to deliver on our 2014 corporate objectives,” President and Chief Executive Officer Raymond Huggenberger said in a news release.

Inogen was founded by a group of UC Santa Barbara undergraduates. The company began to grow rapidly when it started marketing directly to consumers, many of whom rent the product through Medicare.

At the same time the company began to rely on reimbursement revenue, Medicare implemented a competitive bidding program to control its costs for oxygen therapy. But Inogen appears to have been an early winner in that process, securing most of the contracts it bid on.

The company said rental revenue was $8.8 million. The number of rental patients was up 49.4 percent, compared to the year before, but rental revenue was up only 28.1 percent because of rental reimbursement rate reductions from Medicare. But Inogen appeared to be handling the Medicare changes effectively, with margins holding steady.

“Despite these significant year-over-year declines in rental reimbursement rates, our gross margin was 50.5 percent in the first quarter of 2014, and was just 100 basis points lower than the 51.5 percent reported in the 2013 period,” the company said.

Inogen said direct sales revenue was up 67 percent to $14.9 million and its private-payor contracts rose 20.5 percent to 53.