Tags: Edwards | Lifesciences | Forecast | profit

Edwards Lifesciences Cuts Forecast as Profit Falls Short

Tuesday, 23 Apr 2013 06:26 PM

Edwards Lifesciences Corp., the biggest maker of aortic heart valves implanted with a catheter, reported first-quarter profit that missed analysts' estimates and cut its forecast for 2013 on sluggish global demand.

Earnings excluding one-time items were 72 cents a share, less than the average of 76 cents from 23 analysts’ estimates compiled by Bloomberg. The company reduced its 2013 profit forecast to a range of $3 to $3.10 a share excluding certain items, from $3.21 to $3.31 projected in February.

Edwards’s competitor for the less-invasive heart valves, Medtronic Inc., may have siphoned some sales from the Sapien device as it tests CoreValve in the U.S., said Jason McGorman, a Bloomberg Industries analyst in Princeton, New Jersey. The U.S. sales for Sapien, which is implanted using a catheter through an artery or directly into the heart, were lower than expected and Edwards cut its full year guidance by $40 million, he said.

“It could be that Medtronic gained greater traction with its Surtavi trial, which is studying lower-risk patients,” McGorman said in an e-mail. “It may also mean that physicians are more concerned about adopting the device after seeing” study results last month that Sapien had a higher than expected rate of leakage surrounding the valve, he said.

Edwards shares declined 14 percent to $71.20 at 5:25 p.m. New York time after closing at $82.81. The shares had risen 13 percent in the past 12 months as of the close of trading Tuesday.

Misses Expectations

Sales of the Irvine, California-based company’s traditional surgical heart valves and critical care products fell during the quarter, while a boost from October’s expanded U.S. approval for Sapien fell short of expectations. Revenue increased 8.2 percent to $496.7 million in the quarter, the company said Tuesday in a statement, compared with the consensus analysts’ estimate of $518.9 million.

“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,” Chief Executive Officer Michael Mussallem said in the statement.

U.S. sales for the Sapien valve were $83 million compared with the $89.7 million consensus target cited by Michael Weinstein, an analyst at JPMorgan Chase & Co. in New York, in a note last month to investors. A surge in demand was expected after U.S. regulators cleared the heart device for more patients, those who also qualified for standard surgery, in October 2012, said Lawrence Biegelsen, an analyst at Well Fargo, in an April 19 note.

Good Progress

“Our transcatheter heart valve clinical results continue to be very positive and we are making good progress on our pipeline of new products that we believe will enable us to strengthen our leadership position,” Mussallem said.

Sales fell 2.7 percent to $198.1 million for traditional surgical heart valves and dropped 3.9 percent to $128.9 million for critical care products as the company reduced its inventory held by distributors in China, Edwards said.

Net income increased to $144.9 million, or $1.24 a share, from $65.1 million, or 55 cents, a year earlier, Edwards said in its statement. The quarterly income included $92 million from an initial payment from Medtronic related to patent litigation and a research-and-development tax credit, the company said.

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Edwards Lifesciences Corp., the biggest maker of aortic heart valves implanted with a catheter, reported first-quarter profit that missed analysts' estimates and cut its forecast for 2013 on sluggish global demand.
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2013-26-23
Tuesday, 23 Apr 2013 06:26 PM
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