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Will Edwards' (EW) Growth in All Lines Drive Q1 Earnings?

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Edwards Lifesciences Corporation (EW - Free Report) is slated to report first-quarter 2018 results, after the market closes on Apr 24. Last quarter, the company’s earnings per share beat the Zacks Consensus Estimate by 4.4%. Moreover, Edwards Lifesciences has delivered positive earnings surprises in three of the trailing four quarters, the average beat being 9.9%. Let's see how things are shaping up prior to this announcement.

Key Catalyst

Similar to the prior quarter, Edwards Lifesciences is expected to gain from strength in Transcatheter Heart Valve Therapy segment (THVT). Banking on continued therapy adoption across all geographies with notable strength in the United States, the company is expected to maintain this bullish trend in the first quarter of 2018 as well.

The company is expected to continue to gain from strong clinical performance from SAPIEN 3 in the United States, as well as strong therapy implementation across all regions. The Zacks Consensus Estimate for transcatheter heart valves (THV) sales in the United States of $471 million shows an increase of 1.3% from the year-ago quarter.

Outside the United States, the underlying growth rate was solid. Double-digit procedure growth in Europe was maintained last quarter. The company also continued to see strong TAVR therapy adoption in Japan driven by SAPIEN 3.

Overall, first-quarter total revenues are projected at $931 million, up 5.3% from the prior-year quarter.

Edwards Lifesciences Corporation Price and EPS Surprise

 

 

Here are the other factors that might influence Edwards Lifesciences’ first-quarter results:

Edwards Lifesciences is expected to continue with its strong performance based on strength in two other segments — Surgical Heart Valve Therapy and Critical Care.

The Surgical Heart Valve Therapy product group delivered strong performance last quarter driven by encouraging performance of new products along with strong uptake of aortic valves across all geographies. Moreover, buoyed with the continued strong adoption of INTUITY Elite valve system, management expects INTUITY Elite valve system sales to remain on track to account for 25% of global aortic sales in fiscal 2018.

Per management, in January 2018, the company had rolled out INSPIRIS RESILIA aortic valves in the United States. Edwards Lifesciences also informed that the planned 2018 launch of INSPIRIS RESILIA in Japan is on track and progressing well. TheZacks Consensus Estimate for Surgical Heart Valve Therapy product sales of $210 million reflects a rise of 5% from the year-ago quarter.

We are also upbeat about Critical Care product group sales witnessing solid growth across all product categories driven by strong growth in the company's core products, mainly in the United States and China.

Also, Edwards Lifesciences aims to strengthen its hold in the Critical Care technologies with the ongoing rollout of HemoSphere monitoring platform and expansion of Enhanced Surgical Recovery programs. Accordingly, the Zacks Consensus Estimate for Critical Care product group sales of $157 million shows an increase of 8.3% from the year-ago quarter.

For the first quarter of 2018, the company projects sales between $900 million and $950 million and adjusted EPS between $1.04 and $1.14.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Edwards Lifesciences has a Zacks Rank #3 and an Earnings ESP of +0.23%, a combination that suggests that the company is likely to beat estimates.

The Zacks Consensus Estimate for earnings of $1.10 reflects a 17% rise on a year-over-year basis.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering as they also have the right combination of elements to post an earnings beat this quarter.

Myriad Genetics, Inc. (MYGN - Free Report) has an Earnings ESP of +0.61% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +3.34% and a Zacks Rank #3.

Quest Diagnostics Incorporated (DGX - Free Report) has an Earnings ESP of +3.19% and a Zacks Rank #3.

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