Plus   Neg

Edwards Lifesciences Profit Rises, Cuts FY View; Shares Plunge

Medical device maker Edwards Lifesciences Corp. (EW), Tuesday reported an increase in profit for the first quarter, driven mainly by revenue growth and stronger margins. First-quarter bottom line growth also reflects gains related to litigation payment and an income tax credit. Nevertheless, earnings and revenues fell short of Wall Street expectations.

Edwards Lifesciences also provided a downbeat earnings forecast for the second quarter and lowered its full year outlook. Shares of Edwards Lifesciences plummeted 14 percent in after-hours trade on the New York Stock Exchange.

Irvine, California-based Edwards Lifesciences' first-quarter profit surged to $144.9 million or $1.24 per share from $65.1 million or $0.55 per share last year.

The company recorded a special pre-tax gain of $83.6 million, an initial payment from Medtronic related to an ongoing U.S. Andersen patent litigation, and also recorded an $8.4 million income tax benefit.

Excluding special items, earnings rose to $0.72 from $0.53 per share last year. On average, 23 analysts polled by Thomson Reuters expected earnings of $0.76 per share for the quarter. Analysts' estimates typically exclude special items.

Edwards Lifesciences sales for the first quarter grew 8.2 percent to $496.7 million from $459.2 million a year ago. Analysts expected revenue of $518.60 million for the quarter.

Surgical heart valve therapy product group sales declined 2.7 percent to $198.1 million, while critical care product sales dropped 3.9 percent to $128.9 million. Sales of transcatheter heart valves surged 39.7 percent to $169.7 million from last year.

Cost of goods sold for the quarter dropped to $122.2 million from $127.3 million last year. Edwards' gross margin advanced to 75.4 percent from 72.3 percent last year, reflecting more profitable product mix and favorable foreign exchange.

"The ongoing adoption in the U.S. drove global transcatheter valve growth of 40 percent," said CEO Michael Mussallem.

Edwards Lifesciences lowered its full-year 2013 outlook. Mussallem observed," Yet, as global sales this quarter across product lines were below our expectations, we are lowering our 2013 guidance primarily to reflect a slower start to the year and an updated foreign exchange impact."

The company now expects full-year adjusted earnings of $3.00 to $3.10 and sales of $2.0 billion to $2.1 billion. Analysts currently expect earnings of $3.27 per share on revenues of $2.13 billion for the year.

Previously, the company expected adjusted earnings of $3.21 to $3.31 per share and sales of $2.1 billion to $2.2 billion.

For the second-quarter, the company expects total sales of $500 million to $530 million and earnings per share, excluding special items, between $0.75 and $0.79. Analysts currently anticipate earnings of $0.81 per share on revenue of $535.70 million for the quarter.

EW closed Tuesday's regular trade at $82.81, down $0.82 or 0.98%, on a volume of 2.6 million shares. In after hours, the stock plunged $11.96 or 14.44%, in after hours trade.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Starbucks wants to be more efficient but it is risking the fragile loyalty of its most devoted customers. The ubiquitous chain plans a major push to get coffee lovers to use its mobile app to place their orders, but regulars prefer to buy their lattes by waiting in the queue. According to reports,... Taco Bell, the Mexican fast-food chain owned by Yum Brands Inc. (YUM), Thursday said it will start selling tortilla chips in grocery and convenience stores starting May. The chips will be available in Fire and Mild sauce packet flavors and also in a Classic flavor. "This launch of our first line... Meredith Corp. said Wednesday that it has decided to explore the sale of its Time, Sports Illustrated, Fortune, and Money brands. In addition, the company will cut 1,000 jobs over the next ten months as part of its plan to realize cost synergies from its acquisition of Time Inc. Further, Meredith has notified about 200 employees that their positions have been eliminated.
comments powered by Disqus
Follow RTT