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Edwards Lifesciences Q1 Profit Tops View; Trims 2012 Outlook

Medical devices maker Edwards Lifesciences Corp. (EW) reported Tuesday a profit for the first quarter that edged up from last year, reflecting improved margins and sales growth. Both adjusted earnings per share and quarterly revenues topped analysts' expectations.

The company also provided earnings and revenue guidance for the second quarter, and trimmed outlook for the full-year 2012 on lower Transcatheter Heart Valves sales outlook.

"This quarter was highlighted by an impressive first full quarter of SAPIEN commercialization in the U.S. Maintaining a high level of acute procedural success in this new therapy is our first priority, and we are pleased with the high rate that has been achieved," Chairman and CEO Michael Mussallem said in a statement.

Irvine, California-based Edwards Lifesciences reported net income of $65.1 million or $0.55 per share for the first quarter, higher than $63.9 million or $0.53 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $62.8 million or $0.53 per share, compared to $63.9 million or $0.53 per share in the year-ago quarter.

On average, 22 analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter improved 13.5 percent to $459.2 million from $404.5 million in the same quarter last year, and topped nineteen Wall Street analysts' consensus estimate of $449.53 million.

Sales for the quarter was driven mainly by a 67.2 percent jump in Transcatheter Heart Valves sales at $121.5 million, while Surgical Heart Valves sales grew a modest 2.2 percent to $176.0 million from a year ago.

Sales in the U.S. rose 25.2 percent, Europe was up 6.6 percent, Japan gained 2.3 percent, and rest of the world sales grew 13.6 percent.

Gross profit margin for the quarter improved 120 basis points to 72.3 percent from last year, driven by more profitable product mix.

Looking ahead to the second quarter, the company expects adjusted earnings in a range of $0.64 to $0.68 per share, on anticipated sales between $470 million and $500 million. Analysts currently expect the company to earn $0.60 per share on revenues of $486.47 million for the quarter.

For fiscal 2012, the company lowered its adjusted earnings outlook to a range of $2.58 to $2.68 per share from the prior guidance of $2.70 to $2.80 per share. Sales are also now projected at the low end of its original guidance range of $1.95 billion to $2.05 billion.

Street is currently looking for full-year 2012 earnings of $2.67 per share on revenues of $1.95 billion.

"Although the near term THV sales outlook has lowered our overall 2012 expectations, we remain as optimistic as ever about the long-term growth opportunity represented by transcatheter valves," Mussalem added.

The company also now expects sales of its transcatheter heart valves to be between $530 million and $600 million in 2012.

EW closed Tuesday's regular trading session at $73.33, down $0.03 or 0.04% on a volume of 1.05 million shares. However, the stock gained $2.67 or 3.64% in after-hours trading.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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