We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Edwards Lifesciences Corp. (EW - Free Report) reported first-quarter 2017 adjusted earnings per share (EPS) of 94 cents, which surpassed the Zacks Consensus Estimate by 14.6%. Adjusted earnings also improved 32.4% year over year, primarily driven by strong sales growth.
Per management, strong sales of transcatheter valves drove the bottom line.
Excluding one-time items, net income in the first quarter came in at $230.2 million or $1.06 per share, up 60.9% or 60.6% year over year respectively.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Edwards Lifesciences’ first-quarter sales improved 26.7% to $883.5 million. The figure also beat the Zacks Consensus Estimate by 13.7%. Underlying sales increased 19.1%, (excluding the impact of Germany stocking sales, as customers in Germany elected to purchase additional inventory of the SAPIEN 3 valve in anticipation of a potential supply interruption resulting from recent intellectual property litigation).
Revenues were primarily driven by considerable growth in transcatheter heart valve sales as well as strong performance by the Critical Care segment.
Segments Details
For the first quarter, the company reported Transcatheter Heart Valve Therapy (THVT) sales of $539.2 million, reflecting 46.6% growth over the prior-year quarter. In the U.S., THVT sales for the quarter were $298.8 million, up 38.1% year over year.
Surgical Heart Valve Therapy sales for the quarter were $199.5 million, up 1.8% from the prior-year quarter. This was led by strong demand for the EDWARDS INTUITY Elite valve system and the supply recovery in mitral valve sales, partially offset by the continuing shift from surgical aortic valves to the SAPIEN 3 valve.
Critical Care sales were $144.8 million in the reported quarter, representing an increase of 8.4% from first-quarter 2016. Solid growth across all product categories was driven by double-digit growth in the company's Enhanced Surgical Recovery Program and a lift from a U.S. bulk order.
Margins
In the first quarter, gross margin expanded 145 basis points (bps) to 75.5% owing to a more profitable product mix, led by growing sales of transcatheter valves. This was however partially offset by adverse foreign exchange.
SG&A expenses rose 7.9% year over year to $229.6 million on account of sales and personnel related expenses, primarily in the Transcatheter Valve (THV) segment. On the other hand, R&D expenditures increased 26.4% year over year to $128.7 million, owing to continued investments in the company’s transcatheter mitral valve and mitral valve programs, including expenditure on clinical trials. Adjusted operating margin in the quarter expanded 601 bps to 35.0% as the rise in revenues outweighed the increase in operating expenses.
Cash Position
Edwards Lifesciences exited the first quarter with cash and cash equivalents and short-term investments of $918.9 million compared to $1.27 billion at the end of fiscal 2016. Long-term debt in the reported quarter totaled $847.9 million, compared with $822.3 million at the end of fiscal 2016.
Cash flow from operating activities was $128.3 million in the first quarter. Excluding capital spending of $15.9 million, free cash flow was $112.4 million. During the quarter, management repurchased 4.6 million shares for $437.4 million to offset dilution associated with its Valtech Cardio acquisition and stock-based incentive compensation.
Updated 2017 Guidance
Edwards Lifesciences has narrowed its full-year 2017 sales to the range of $3.2–$3.4 billion from $3.0–$3.4 billion. The Zacks Consensus Estimate for full-year revenue is $3.24 billion, above the guided range. Adjusted EPS expectations have however been raised to $3.43–$3.55 from $3.30 to $3.45. The Zacks Consensus Estimate for full-year adjusted EPS is $3.40, within the company’s guided range.
For the second quarter of 2017, the company projects sales (excluding the effect of Germany stocking sales) between $810 million and $850 million. The Zacks Consensus Estimate for revenue is $817.2 million, within the projected range. The company estimates adjusted EPS between 79 cents and 89 cents. Meanwhile, the Zacks Consensus Estimate for adjusted EPS is 86 cents, which is also within the company-forecasted range.
Our Take
Edwards Lifesciences exited the first quarter on a solid note, with both earnings and revenue beating the Zacks Consensus Estimate. Strong transcatheter valve sales were a major positive. The company also performed well on its gross margin front which raises optimism. However, Edwards Lifesciences’ narrowed revenue guidance hints at looming concerns ahead. The ongoing legal matter with Boston Scientific may also weigh on the stock.
Nevertheless, management expects to gain traction in the ever expanding TAVR market, based on increasing preference in favor of transcatheter aortic valve replacement as well as compelling clinical evidences, leading to strong adoption of THV therapy.
Zacks Rank & Key Picks
Edward Lifesciences currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Medical space include Inogen, Inc. (INGN - Free Report) , ZELTIQ Aesthetics, Inc. and Hill-Rom Holdings, Inc. . While Inogen and ZELTIQ Aesthetics sport a Zacks Rank #1 (Strong Buy), Hill-Rom carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained 62% in the last one year, compared with the S&P 500’s gain of 14.0%. The company reported a stellar four-quarter positive average earnings surprise of over 49.08%.
ZELTIQ Aesthetics surged 82.8% in the last one year, compared with the S&P 500’s gain. Its four-quarter average earnings surprise was a positive of 12.30%.
Hill-Rom gained over 33.7% in the past one year, better than the S&P 500 mark. It posted a trailing four-quarter positive average earnings surprise of 3.1%.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
Image: Bigstock
Edwards Lifesciences (EW) Tops Q1 Earnings, Updates '17 View
Edwards Lifesciences Corp. (EW - Free Report) reported first-quarter 2017 adjusted earnings per share (EPS) of 94 cents, which surpassed the Zacks Consensus Estimate by 14.6%. Adjusted earnings also improved 32.4% year over year, primarily driven by strong sales growth.
Per management, strong sales of transcatheter valves drove the bottom line.
Excluding one-time items, net income in the first quarter came in at $230.2 million or $1.06 per share, up 60.9% or 60.6% year over year respectively.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise | Edwards Lifesciences Corporation Quote
Sales Details
Edwards Lifesciences’ first-quarter sales improved 26.7% to $883.5 million. The figure also beat the Zacks Consensus Estimate by 13.7%. Underlying sales increased 19.1%, (excluding the impact of Germany stocking sales, as customers in Germany elected to purchase additional inventory of the SAPIEN 3 valve in anticipation of a potential supply interruption resulting from recent intellectual property litigation).
Revenues were primarily driven by considerable growth in transcatheter heart valve sales as well as strong performance by the Critical Care segment.
Segments Details
For the first quarter, the company reported Transcatheter Heart Valve Therapy (THVT) sales of $539.2 million, reflecting 46.6% growth over the prior-year quarter. In the U.S., THVT sales for the quarter were $298.8 million, up 38.1% year over year.
Surgical Heart Valve Therapy sales for the quarter were $199.5 million, up 1.8% from the prior-year quarter. This was led by strong demand for the EDWARDS INTUITY Elite valve system and the supply recovery in mitral valve sales, partially offset by the continuing shift from surgical aortic valves to the SAPIEN 3 valve.
Critical Care sales were $144.8 million in the reported quarter, representing an increase of 8.4% from first-quarter 2016. Solid growth across all product categories was driven by double-digit growth in the company's Enhanced Surgical Recovery Program and a lift from a U.S. bulk order.
Margins
In the first quarter, gross margin expanded 145 basis points (bps) to 75.5% owing to a more profitable product mix, led by growing sales of transcatheter valves. This was however partially offset by adverse foreign exchange.
SG&A expenses rose 7.9% year over year to $229.6 million on account of sales and personnel related expenses, primarily in the Transcatheter Valve (THV) segment. On the other hand, R&D expenditures increased 26.4% year over year to $128.7 million, owing to continued investments in the company’s transcatheter mitral valve and mitral valve programs, including expenditure on clinical trials. Adjusted operating margin in the quarter expanded 601 bps to 35.0% as the rise in revenues outweighed the increase in operating expenses.
Cash Position
Edwards Lifesciences exited the first quarter with cash and cash equivalents and short-term investments of $918.9 million compared to $1.27 billion at the end of fiscal 2016. Long-term debt in the reported quarter totaled $847.9 million, compared with $822.3 million at the end of fiscal 2016.
Cash flow from operating activities was $128.3 million in the first quarter. Excluding capital spending of $15.9 million, free cash flow was $112.4 million. During the quarter, management repurchased 4.6 million shares for $437.4 million to offset dilution associated with its Valtech Cardio acquisition and stock-based incentive compensation.
Updated 2017 Guidance
Edwards Lifesciences has narrowed its full-year 2017 sales to the range of $3.2–$3.4 billion from $3.0–$3.4 billion. The Zacks Consensus Estimate for full-year revenue is $3.24 billion, above the guided range. Adjusted EPS expectations have however been raised to $3.43–$3.55 from $3.30 to $3.45. The Zacks Consensus Estimate for full-year adjusted EPS is $3.40, within the company’s guided range.
For the second quarter of 2017, the company projects sales (excluding the effect of Germany stocking sales) between $810 million and $850 million. The Zacks Consensus Estimate for revenue is $817.2 million, within the projected range. The company estimates adjusted EPS between 79 cents and 89 cents. Meanwhile, the Zacks Consensus Estimate for adjusted EPS is 86 cents, which is also within the company-forecasted range.
Our Take
Edwards Lifesciences exited the first quarter on a solid note, with both earnings and revenue beating the Zacks Consensus Estimate. Strong transcatheter valve sales were a major positive. The company also performed well on its gross margin front which raises optimism. However, Edwards Lifesciences’ narrowed revenue guidance hints at looming concerns ahead. The ongoing legal matter with Boston Scientific may also weigh on the stock.
Nevertheless, management expects to gain traction in the ever expanding TAVR market, based on increasing preference in favor of transcatheter aortic valve replacement as well as compelling clinical evidences, leading to strong adoption of THV therapy.
Zacks Rank & Key Picks
Edward Lifesciences currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the broader Medical space include Inogen, Inc. (INGN - Free Report) , ZELTIQ Aesthetics, Inc. and Hill-Rom Holdings, Inc. . While Inogen and ZELTIQ Aesthetics sport a Zacks Rank #1 (Strong Buy), Hill-Rom carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained 62% in the last one year, compared with the S&P 500’s gain of 14.0%. The company reported a stellar four-quarter positive average earnings surprise of over 49.08%.
ZELTIQ Aesthetics surged 82.8% in the last one year, compared with the S&P 500’s gain. Its four-quarter average earnings surprise was a positive of 12.30%.
Hill-Rom gained over 33.7% in the past one year, better than the S&P 500 mark. It posted a trailing four-quarter positive average earnings surprise of 3.1%.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
Click here for a peek at this private information >>