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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