Breaking News
FONT-SIZE Plus   Neg
Share SHARE

Edwards Lifesciences Profit Rises, Cuts FY View; Shares Plunge

Medical device maker Edwards Lifesciences Corp. (EW: Quote), 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.

Register
To receive FREE breaking news email alerts for Edwards Lifesciences Corp. and others in your portfolio

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
The U.K. economy grew more than estimated in the second quarter and the current account deficit widened from the first quarter, the Office for National Statistics said Tuesday. Gross domestic product grew 0.9 percent sequentially, up from the prior estimate of 0.8 percent. The annual growth was confirmed at 3.2 percent. Eurozone inflation slowed in September, as expected, to the lowest since late 2009 and the unemployment rate remained stable at a double digit level in August putting pressure on the European Central Bank to launch a full-blown easing. Inflation came in at 0.3 percent, slower than August's 0.4 percent. This was the lowest since October 2009, when prices fell 0.1 percent. Chinese authorities on Tuesday eased some rules for mortgages for buying a second home, in a bid to boost the housing market. The People's Bank of China and the China Banking Regulatory Commission said in a joint statement that buyers who already own one apartment, but have paid off the mortgage...
comments powered by Disqus
FREE Newsletters, Analysis & Alerts

 

Stay informed with our FREE daily Newsletters and real-time breaking News Alerts. Sign up to receive the latest information on business news, health, technology, biotech, market analysis, currency trading and more.