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Edwards Lifesciences (EW) Q4 Earnings In Line, Revenues Top
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Edwards Lifesciences Corporation’s(EW - Free Report) fourth-quarter 2018 adjusted earnings per share (EPS) came in at $1.17. The company posted reported EPS of 3 cents.
Adjusted EPS were in line with the Zacks Consensus Estimate. Moreover, the figure improved 24.5% year over year primarily on growth in all the businesses.
2018 adjusted EPS came in at $4.70, up 23.7% year over year and in line with the Zacks Consensus Estimate.
Sales Details
Fourth-quarter net sales improved 10% to $977.7 million and surpassed the Zacks Consensus Estimate of $973.7 million. Underlying sales increased 9.8%, excluding the impact of currency translations and a sales return reserve associated with a surgical heart valve consignment conversion. This also does not consider the positive impact of THVT stocking sales in Germany in the previous year as well as the adverse impact of de-stocking.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Revenues were primarily driven by considerable growth in transcatheter heart valve sales as well as strong performance by the Surgical Structural Heart and Critical Care product lines.
In 2018, net sales totaled $3.72 billion, up 8.1% year over year. However, the figure missed the Zacks Consensus Estimate of $3.79 billion.
Segmental Details
In the fourth quarter, sales in the Transcatheter Heart Valve Therapy (THVT) amounted to $592.4 million, up 14.1% from the prior-year quarter’s tally. Globally, transcatheter aortic valve replacement (TAVR) procedures continued to deliver growth in the mid-teens. However, the company’s global sales growth has decelerated due to modest year-over-year shares decline due to company consistently exercising price discipline and maintaining stability in global average selling prices.
Also, the company continues with the controlled roll out of the SAPIEN 3 Ultra system in Europe and the United States. Furthermore, persistent supply constraints affected the Cardioband system’s sales, which were recorded at around $1 million.
Surgical Structural Heart sales in the quarter totaled $207.2 million, up 1.1% from the prior-year quarter’s figure. Edwards Lifesciences continued to see solid uptake of its new premium aortic valves along with solid aortic unit volume. Further, the company is engaged in the launch of INSPIRIS RESILIA aortic valve in all major regions.
Critical Care sales totaled $178.1 million in the reported quarter, up 8.4% from fourth-quarter 2017 tally. The upside can be attributed to solid growth across all product categories, primarily led by HemoSphere advanced monitoring platform and consistent strength in Enhanced Recovery. Moreover, the company continued to deliver impressive performance in the United States.
Margins
In the fourth quarter, gross margin expanded 250 basis points (bps) to 76% owing to a more profitable product mix, favorable currency movements and absence of expenses related to the closure of its manufacturing plant in Switzerland in 2018. However, this was partially offset by persistent capacity-related expenses.
SG&A expenses rose 5.6% year over year to $288.1 million, thanks to initiatives for increasing TAVR therapy adoption. However, the rise was partially offset by reduced reported expenses globally on strengthening U.S. dollar. R&D expenditures increased 11.3% year over year to $163.1 million due to continued investments in the transcatheter structural heart programs and on clinical trials. Accordingly, adjusted operating margin in the quarter expanded 350 bps to 29.8%.
Cash Position
Edwards Lifesciences exited 2018 with cash and cash equivalents and short-term investments of $956.5 million, compared with $1.34 billion in 2017. Long-term debt at the end of 2018 totaled $593.8 million compared with $438.4 million at the end of 2017.
In 2018, net cash provided by operating activities was $926.8 million compared with $1 billion a year ago. During the quarter, average diluted shares outstanding totaled 212.2 million.
2019 Guidance Intact
Edwards Lifesciences reiterated 2019 adjusted EPS expectations in the $5.05-5.30 range. The Zacks Consensus Estimate for full-year adjusted EPS is $5.21, within the company’s guidance.
Also, the company continues to maintain sales expectations in the range of $3.9-$4.3 billion. The Zacks Consensus Estimate for full-year revenues is pinned at $4.13 billion, within the guided range.
For the first quarter of 2019, the company projects sales between $950 million and $1.01 billion. The Zacks Consensus Estimate for revenues is pegged at $995.9 million, within the company’s estimates. Edwards Lifesciences forecasts adjusted EPS between $1.15 and $1.25. Meanwhile, the Zacks Consensus Estimate for adjusted EPS is pegged at $1.30, above the company’s projection.
Our Take
Edwards Lifesciences exited the fourth quarter on a mixed note. Globally, TAVR procedures continued to deliver growth in the mid-teens. Also, the company is maintaining the controlled roll out of the SAPIEN 3 Ultra system in Europe and the United States. Moreover, improving margins buoy optimism.
Meanwhile, persistent supply constraints affected the Cardioband system’s sales. Also, tough competition in the cardiac devices market and reimbursement issues raise concerns.
Zacks Rank & Key Picks
Edwards Lifesciences has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Varian Medical Systems , AngioDynamics (ANGO - Free Report) and CONMED Corporation (CNMD - Free Report) .
AngioDynamics’ fiscal second-quarter adjusted earnings of 22 cents per share beat the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, surpassing the consensus estimate by 2.9%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Varian’s fiscal first-quarter adjusted earnings of $1.06 per share were in line with the Zacks Consensus Estimate. Revenues of $741 million outpaced the consensus mark of $717.9 million. The stock has a Zacks Rank #2 (Buy).
CONMED’s fourth-quarter adjusted earnings per share of 73 cents met the Zacks Consensus Estimate. Revenues of $242.4 million surpassed the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank #2.
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Edwards Lifesciences (EW) Q4 Earnings In Line, Revenues Top
Edwards Lifesciences Corporation’s (EW - Free Report) fourth-quarter 2018 adjusted earnings per share (EPS) came in at $1.17. The company posted reported EPS of 3 cents.
Adjusted EPS were in line with the Zacks Consensus Estimate. Moreover, the figure improved 24.5% year over year primarily on growth in all the businesses.
2018 adjusted EPS came in at $4.70, up 23.7% year over year and in line with the Zacks Consensus Estimate.
Sales Details
Fourth-quarter net sales improved 10% to $977.7 million and surpassed the Zacks Consensus Estimate of $973.7 million. Underlying sales increased 9.8%, excluding the impact of currency translations and a sales return reserve associated with a surgical heart valve consignment conversion. This also does not consider the positive impact of THVT stocking sales in Germany in the previous year as well as the adverse impact of de-stocking.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise | Edwards Lifesciences Corporation Quote
Revenues were primarily driven by considerable growth in transcatheter heart valve sales as well as strong performance by the Surgical Structural Heart and Critical Care product lines.
In 2018, net sales totaled $3.72 billion, up 8.1% year over year. However, the figure missed the Zacks Consensus Estimate of $3.79 billion.
Segmental Details
In the fourth quarter, sales in the Transcatheter Heart Valve Therapy (THVT) amounted to $592.4 million, up 14.1% from the prior-year quarter’s tally. Globally, transcatheter aortic valve replacement (TAVR) procedures continued to deliver growth in the mid-teens. However, the company’s global sales growth has decelerated due to modest year-over-year shares decline due to company consistently exercising price discipline and maintaining stability in global average selling prices.
Also, the company continues with the controlled roll out of the SAPIEN 3 Ultra system in Europe and the United States. Furthermore, persistent supply constraints affected the Cardioband system’s sales, which were recorded at around $1 million.
Surgical Structural Heart sales in the quarter totaled $207.2 million, up 1.1% from the prior-year quarter’s figure. Edwards Lifesciences continued to see solid uptake of its new premium aortic valves along with solid aortic unit volume. Further, the company is engaged in the launch of INSPIRIS RESILIA aortic valve in all major regions.
Critical Care sales totaled $178.1 million in the reported quarter, up 8.4% from fourth-quarter 2017 tally. The upside can be attributed to solid growth across all product categories, primarily led by HemoSphere advanced monitoring platform and consistent strength in Enhanced Recovery. Moreover, the company continued to deliver impressive performance in the United States.
Margins
In the fourth quarter, gross margin expanded 250 basis points (bps) to 76% owing to a more profitable product mix, favorable currency movements and absence of expenses related to the closure of its manufacturing plant in Switzerland in 2018. However, this was partially offset by persistent capacity-related expenses.
SG&A expenses rose 5.6% year over year to $288.1 million, thanks to initiatives for increasing TAVR therapy adoption. However, the rise was partially offset by reduced reported expenses globally on strengthening U.S. dollar. R&D expenditures increased 11.3% year over year to $163.1 million due to continued investments in the transcatheter structural heart programs and on clinical trials. Accordingly, adjusted operating margin in the quarter expanded 350 bps to 29.8%.
Cash Position
Edwards Lifesciences exited 2018 with cash and cash equivalents and short-term investments of $956.5 million, compared with $1.34 billion in 2017. Long-term debt at the end of 2018 totaled $593.8 million compared with $438.4 million at the end of 2017.
In 2018, net cash provided by operating activities was $926.8 million compared with $1 billion a year ago. During the quarter, average diluted shares outstanding totaled 212.2 million.
2019 Guidance Intact
Edwards Lifesciences reiterated 2019 adjusted EPS expectations in the $5.05-5.30 range. The Zacks Consensus Estimate for full-year adjusted EPS is $5.21, within the company’s guidance.
Also, the company continues to maintain sales expectations in the range of $3.9-$4.3 billion. The Zacks Consensus Estimate for full-year revenues is pinned at $4.13 billion, within the guided range.
For the first quarter of 2019, the company projects sales between $950 million and $1.01 billion. The Zacks Consensus Estimate for revenues is pegged at $995.9 million, within the company’s estimates. Edwards Lifesciences forecasts adjusted EPS between $1.15 and $1.25. Meanwhile, the Zacks Consensus Estimate for adjusted EPS is pegged at $1.30, above the company’s projection.
Our Take
Edwards Lifesciences exited the fourth quarter on a mixed note. Globally, TAVR procedures continued to deliver growth in the mid-teens. Also, the company is maintaining the controlled roll out of the SAPIEN 3 Ultra system in Europe and the United States. Moreover, improving margins buoy optimism.
Meanwhile, persistent supply constraints affected the Cardioband system’s sales. Also, tough competition in the cardiac devices market and reimbursement issues raise concerns.
Zacks Rank & Key Picks
Edwards Lifesciences has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Varian Medical Systems , AngioDynamics (ANGO - Free Report) and CONMED Corporation (CNMD - Free Report) .
AngioDynamics’ fiscal second-quarter adjusted earnings of 22 cents per share beat the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, surpassing the consensus estimate by 2.9%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Varian’s fiscal first-quarter adjusted earnings of $1.06 per share were in line with the Zacks Consensus Estimate. Revenues of $741 million outpaced the consensus mark of $717.9 million. The stock has a Zacks Rank #2 (Buy).
CONMED’s fourth-quarter adjusted earnings per share of 73 cents met the Zacks Consensus Estimate. Revenues of $242.4 million surpassed the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>