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Why Is Edwards Lifesciences (EW) Down 11.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for Edwards Lifesciences (EW - Free Report) . Shares have lost about 11.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Edwards Lifesciences due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Edwards Lifesciences Q1 Earnings Top Estimates, Margins Up
Edwards Lifesciences Corporation first-quarter 2022 adjusted earnings per share of 60 cents surpassed the Zacks Consensus Estimate by 3.5%. The figure improved 11.1% year over year.
GAAP earnings per share was 59 cents in the quarter compared with the year-ago EPS of 54 cents, reflecting an improvement of 9.3%.
Sales Details
First-quarter net sales were $1.34 billion, up 10.2% year over year on a reported basis. On an underlying basis, growth was 13%. The metric surpassed the Zacks Consensus Estimate by 2.4%.
Segmental Details
In the first quarter, global sales in the Transcatheter Aortic Valve Replacement product group amounted to $881.3 million, up 11% from the prior-year figure on a reported basis. On an underlying basis, growth was 13.7%. Average selling prices were stable worldwide. Outside the United States, total TAVR sales increased 20% on a year-over-year basis.
Transcatheter Mitral and Tricuspid Therapies sales totaled $27 million, up 65.7% from the prior-year figure on a reported basis. On an underlying basis, the improvement was 73%. The company continued to register strong momentum on increased adoption of the PASCAL platform in Europe.
Surgical Structural Heart sales in the quarter totaled $220.8 million, up 3.7% from the year-ago quarter on a reported basis and 6.3% on an underlying basis. Revenue growth was lifted by increased penetration of premium technologies and procedure growth.
Critical Care sales totaled $212.1 million in the first quarter, up 8.4% from the year-ago quarter on a reported basis and 11% on an underlying basis. The revenue uptick resulted from balanced contributions from all product lines, led by the continued strength of the HemoSphere monitoring platform.
Margins
In the first quarter, gross profit was $1.04 billion, up 12.9%. Gross margin expanded 180 basis points (bps) to 77.7%.
The company-provided adjusted gross margin was 77.8%, reflecting a year-over-year expansion of 80 bps. This increase was primarily driven by the favorable impact of foreign exchange, mainly the strengthening of the dollar against the euro and yen.
Selling, general and administrative expenses rose 11.9% year over year to $370.3 million, primarily driven by field-based personnel-related costs and commercial activities supporting the company's growth.
Research and development expenditures were $228.6 million, up 10.4% year over year. This increase was driven by continued investments in the company's transcatheter innovations, including increased clinical trial activity. These developments drove operating costs by 11.4% to $598.9 million.
During the reported quarter, operating income rose 14.9% year over year to $443 million. Operating margin expanded 135 bps to 33%.
Cash Position
Edwards Lifesciences exited the first quarter of 2022 with cash and cash equivalents and short-term investments of $1.50 billion compared with $1.47 billion recorded at the end of fourth-quarter 2021. Long-term debt was $595.9 million at the end of the first quarter of 2022, up from $595.7 million at the end of the fourth quarter of 2021.
Cumulative net cash provided by operating activities at the end of the first quarter of 2022 was $221 million compared with $195 million a year ago. Capital expenditure for the same period was $73 million compared with $106 million a year ago.
Guidance
The company has provided its second-quarter 2022 guidance.
For the quarter, the company projects total sales in the range of $1.36-$1.44 billion. The Zacks Consensus Estimate for the same is pegged at $1.44 billion.
Adjusted earnings per share is expected in the band of 61-69 cents. The Zacks Consensus Estimate for the metric is pegged at 65 cents. The company has reaffirmed its guidance for full-year 2022.
Full-year 2022 sales are expected to grow at a low double-digit rate to $5.50-$6.00 billion. The Zacks Consensus Estimate for the same is pegged at $5.73 billion.
The company continues to expect full-year 2022 adjusted earnings per share in the range of $2.50-$2.65. The Zacks Consensus Estimate for the metric is pegged at $2.57.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Edwards Lifesciences has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Edwards Lifesciences has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Edwards Lifesciences (EW) Down 11.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Edwards Lifesciences (EW - Free Report) . Shares have lost about 11.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Edwards Lifesciences due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Edwards Lifesciences Q1 Earnings Top Estimates, Margins Up
Edwards Lifesciences Corporation first-quarter 2022 adjusted earnings per share of 60 cents surpassed the Zacks Consensus Estimate by 3.5%. The figure improved 11.1% year over year.
GAAP earnings per share was 59 cents in the quarter compared with the year-ago EPS of 54 cents, reflecting an improvement of 9.3%.
Sales Details
First-quarter net sales were $1.34 billion, up 10.2% year over year on a reported basis. On an underlying basis, growth was 13%. The metric surpassed the Zacks Consensus Estimate by 2.4%.
Segmental Details
In the first quarter, global sales in the Transcatheter Aortic Valve Replacement product group amounted to $881.3 million, up 11% from the prior-year figure on a reported basis. On an underlying basis, growth was 13.7%. Average selling prices were stable worldwide. Outside the United States, total TAVR sales increased 20% on a year-over-year basis.
Transcatheter Mitral and Tricuspid Therapies sales totaled $27 million, up 65.7% from the prior-year figure on a reported basis. On an underlying basis, the improvement was 73%. The company continued to register strong momentum on increased adoption of the PASCAL platform in Europe.
Surgical Structural Heart sales in the quarter totaled $220.8 million, up 3.7% from the year-ago quarter on a reported basis and 6.3% on an underlying basis. Revenue growth was lifted by increased penetration of premium technologies and procedure growth.
Critical Care sales totaled $212.1 million in the first quarter, up 8.4% from the year-ago quarter on a reported basis and 11% on an underlying basis. The revenue uptick resulted from balanced contributions from all product lines, led by the continued strength of the HemoSphere monitoring platform.
Margins
In the first quarter, gross profit was $1.04 billion, up 12.9%. Gross margin expanded 180 basis points (bps) to 77.7%.
The company-provided adjusted gross margin was 77.8%, reflecting a year-over-year expansion of 80 bps. This increase was primarily driven by the favorable impact of foreign exchange, mainly the strengthening of the dollar against the euro and yen.
Selling, general and administrative expenses rose 11.9% year over year to $370.3 million, primarily driven by field-based personnel-related costs and commercial activities supporting the company's growth.
Research and development expenditures were $228.6 million, up 10.4% year over year. This increase was driven by continued investments in the company's transcatheter innovations, including increased clinical trial activity. These developments drove operating costs by 11.4% to $598.9 million.
During the reported quarter, operating income rose 14.9% year over year to $443 million. Operating margin expanded 135 bps to 33%.
Cash Position
Edwards Lifesciences exited the first quarter of 2022 with cash and cash equivalents and short-term investments of $1.50 billion compared with $1.47 billion recorded at the end of fourth-quarter 2021. Long-term debt was $595.9 million at the end of the first quarter of 2022, up from $595.7 million at the end of the fourth quarter of 2021.
Cumulative net cash provided by operating activities at the end of the first quarter of 2022 was $221 million compared with $195 million a year ago. Capital expenditure for the same period was $73 million compared with $106 million a year ago.
Guidance
The company has provided its second-quarter 2022 guidance.
For the quarter, the company projects total sales in the range of $1.36-$1.44 billion. The Zacks Consensus Estimate for the same is pegged at $1.44 billion.
Adjusted earnings per share is expected in the band of 61-69 cents. The Zacks Consensus Estimate for the metric is pegged at 65 cents.
The company has reaffirmed its guidance for full-year 2022.
Full-year 2022 sales are expected to grow at a low double-digit rate to $5.50-$6.00 billion. The Zacks Consensus Estimate for the same is pegged at $5.73 billion.
The company continues to expect full-year 2022 adjusted earnings per share in the range of $2.50-$2.65. The Zacks Consensus Estimate for the metric is pegged at $2.57.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
Currently, Edwards Lifesciences has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Edwards Lifesciences has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.