Edwards Lifesciences Shares Fall After-Hours
October 25 2016 - 09:40PM
Dow Jones News
Shares of Edwards Lifesciences Corp. fell sharply in after-hours
trading Tuesday after the medical-device maker reported
lower-than-expected sales of its minimally invasive heart valves in
the third quarter.
Sales of the company's Sapien heart valves grew 38.5% to $410.1
million in the quarter, lower than the $427.1 million projected by
analysts, according to FactSet.
It appeared much of the revenue shortfall was due to the
company's performance in international markets. The company reduced
shipments to France in the third quarter because of a government
policy there that caps the number of minimally-invasive procedures
performed with aortic heart valves like the ones Edwards makes,
Chief Executive Michael A. Mussallem said during a conference call
with analysts on Tuesday.
"The situation in France was one that was unexpected," Mr.
Mussallem said on the call. "So that was a little bit of a
curveball, but not much else is off-track."
Shares of Edwards fell 13.5% to $98.38 in after-hours trading.
Through the close of regular trading on Tuesday, shares of Edwards
had risen 44% so far this year, making it one of the year's
best-performing medical-device stocks.
The dramatic stock-market reaction on Tuesday overshadowed a
third-quarter in which Edwards' profit rose roughly 20% to $141.4
million, or 65 cents a share, from $118.1 million, or 54 cents a
share, a year earlier. The company's total revenue also increased
20% to $739.4 million, from $615.5 million in the third-quarter of
last year. The results were in-line with the company's guidance for
the quarter.
Edwards, based in Irvine, Calif., is one of the biggest global
makers of aortic valves that are implanted via catheters instead of
through open-heart surgery, which many doctors say is a more
convenient procedure with faster recovery times. The valves
comprise more than half of Edwards' sales and nearly all of its
growth.
Some analysts said on the call that investors had also expected
higher U.S. sales growth forecasts for the Sapien valves for the
full year. In August, the Food and Drug Administration approved use
of an Edwards valve in U.S. patients with an intermediate risk of
complications from open-heart surgery. The approval was seen as
increasing Edwards' advantage in the U.S. over its primary
competitor Medtronic PLC, whose valves are approved for use only in
sicker patients.
U.S. Sapien valve sales rose 56% to $259.5 million in the third
quarter, exceeding the $258.9 million projected by analysts.
Abroad, sales of the valves grew 16% to $150.6 million, compared
with $157.6 million that analysts had expected.
For the year, the company raised its per-share earnings estimate
to $2.82 and $2.92, from its previous estimate for per-share profit
of $2.78 to $2.88, and reiterated that it expects sales at the
higher-end of a range from $2.7 billion to $3 billion.
For the fourth quarter, Edwards forecast per-share earnings of
67 cents to 77 cents and revenue of $750 million to $790 million.
Analysts polled by Thomson Reuters expected per-share profit of 74
cents and revenue of $801.9 million.
Tess Stynes contributed to this article.
Write to Joseph Walker at joseph.walker@wsj.com
(END) Dow Jones Newswires
October 25, 2016 21:25 ET (01:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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