(Updates throughout with details on results, company comments.)
By Jon Kamp
Of DOW JONES NEWSWIRES
Edwards Lifesciences Corp.'s (EW) third-quarter earnings more than doubled behind gains linked to divested products and with help from rising sales of replacement heart valves, including newer valves that don't require major surgery.
The company now expects sales of these devices, known as transcatheter heart valves and sold under the name "Sapien," to more than double to about $110 million this year. It previously estimated sales of more than $100 million. These devices are currently on sale in Europe, and Edwards hopes to reach the U.S. in 2011.
The Irvine, Calif., company also boosted its overall sales guidance while it raised the bottom end of its 2009 profit guidance by 2 cents.
Michael A. Mussallem, chairman and chief executive, said Edwards continues to expect to meet or exceed all previously stated financial goals.
Edwards shares rose 1.3% to $72 in after-hours trading after sinking 0.7% during Wednesday's regular trading session. Shares are up more than 29% on the year.
The company earned $73.5 million, or $1.25 a share, in the third quarter compared with $32.9 million, or 56 cents a share, a year earlier. Recent results were boosted by the sale of the company's hemofiltration product line to Baxter International Inc. (BAX) and a milestone payment linked to a prior product sale.
Excluding items, Edwards said the latest quarter's earnings were 71 cents, just above its projection of 66 cents to 70 cents. Analysts surveyed by Thomson Reuters had, on average, forecast earnings of 70 cents in the recent quarter.
Net sales grew 7.3% to $325.7 million, but rose 13% excluding currency changes and divestitures. Analysts projected $313.8 million.
Gross margins widened to 69.8% from 65.4%.
Heart-valve sales were $174.1 million, rising 19% excluding currency translation. Included within this tally were $26.4 million in transcatheter heart-valve sales.
This doubles results from last year and is about the same as the second-quarter tally, but third-quarter sales are typically restrained in Europe by summer vacations. The new guidance implies a jump to sales about $33 million in the fourth quarter, Mussallem noted.
The valves can be threaded into place with a catheter in the femoral artery or delivered through an incision between the ribs. The valves are seen as an option for patients who are too sick or frail to withstand traditional heart surgery.
Edwards competes against Medtronic Inc. (MDT) in Europe but believes it has a long head start in the race to the domestic market. Edwards said on Aug. 31 that it had completed enrollment in the company-funded, 1,040-patient "Partner" trial aimed at gathering evidence to back U.S. approval.
The company expects to start enrolling patients in the first quarter next year for another trial aimed at gathering evidence for an upgraded version of Sapien.
Sales in Edwards' critical-care business rose 8.4% to $114.2 million, excluding currency, while sales in the much smaller cardiac-surgery business grew 6.2% excluding currency.
Looking ahead, Edwards said it now sees sales between $1.31 and $1.33 billion this year, which compares with analysts' average estimate of $1.29 billion. It sees full-year earnings of $3.02 to $3.06 per share.
The company projected fourth-quarter earnings of 82 cents to 86 cents. Analysts had projected 83 cents.
- By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com
(Jay Miller contributed to this article.)