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Edward Lifesciences (EW): What's in Store in Q4 Earnings?
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Edward Lifesciences Corp. (EW - Free Report) is scheduled to report fourth-quarter and full-year 2016 earnings results after market close on Feb 1, 2017.
Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate. It is worth noting that Edward Lifesciences has outperformed the Zacks Consensus Estimate in three of the preceding four quarters with an average positive earnings surprise of 5.73%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
Edward Lifesciences posted a strong global sales performance in the third quarter, primarily buoyed by strong Transcatheter Heart Valve sales. Banking on continued strong therapy adoption across all geographies with notable strength in the U.S. and Japan, Edwards is expected to maintain this growth momentum in the fourth quarter as well.
Edwards Lifesciences Corporation Price and EPS Surprise
Management is especially encouraged by the strong adoption of TAVR in Japan, with the rollout of SAPIEN 3, expected to be completed during the fourth quarter. In Europe, the company expects strong procedure growth across most of countries. Also, based on revised clinical guidelines and updated reimbursement policies in Europe, we are currently looking forward to gradual expansion of SAPIEN 3 that received an intermediate risk indication lately. All these catalysts are expected to factor the company’s topline performance from the fourth quarter itself.
The company has recently disclosed that it is investing aggressively in research and development to generate transformational new TAVR products to further distinguish its leadership position. We believe this endeavor will help the company to bolster its position further in the global TAVR space. However, it expects fourth-quarter results to be impacted on resumed shipments. However, management expects this to return to a near normal run rate by year-end. Transcatheter Heart Valve sales for the fourth quarter are expected to be in the range of $415 million to $430 million, consistent with the earlier guidance.
Coming to surgical heart valve, like the third quarter, Edwards expects this segment to perform dull in the fourth quarter as well. Recently, in an investors meet, the company noted that its fourthquarter sales are trending toward the lower end of the previously stated $750 million to $790 million guidance, primarily due to disappointing Surgical Heart Valve Therapy sales.
According to the company, the continued strong adoption of TAVR therapy has partially marred surgical heart valve solutions growth in the U.S. and Europe. However, according to the company, regions with less TAVR penetration should continue to deliver strong growth.
Also, management expects significant contribution from the launch of INTUITY Elite valve system, a rapid deployment device for surgical aortic valve replacement in the U.S. Under the same group, another of the company’s products got CE marked – INSPIRIS RESILIA aortic valve – the first in a new class of resilient heart valves. This strategic portfolio expansion is expected to get reflected in the forthcoming quarter’s top-line performance.
Edwards Lifesciences has been performing well in its critical care product segment for quite some time now. Meanwhile, the recent CE mark for its Acumen Hypotension Probability Indicator (HPI) is likely to help the company expand in the critical care equipment market in Europe. Management expects to maintain the first-half sales momentum at this segment, going forward.
In this regard we note that, the company continues to invest in R&D which is expected to account for approximately 15% and 16% of sales in the fourth quarter.
Estimate Revision Trend
If we observe the estimate revision trend over the past one month, we can see that it is moving down with one estimate going south and none going at the opposite direction. However, the magnitude of the estimate revision trend is indicating a stable picture with the fourth quarter earnings estimates remaining unchanged at 72 cents, over the last 30 days.
Based on the company’s fundamentals and indefinite estimate revision trend discussed above, we cannot conclusively say that Edwards Lifesciences in going to beat earnings in the quarter.
Earnings Whispers
Our quantitative model also doesn’t point to an earnings beat. Here’s why:
Edward Lifesciences doesn’t have the right combination of the two key ingredients – positive Earnings ESP and a Zacks Rank #3 (Hold) or better – for increasing the odds of an earnings beat.
Zacks ESP: The Earnings ESP for Edward Lifesciences is -1.39%. This is because the Most Accurate estimate of 71 cents remains a penny short of the Zacks Consensus Estimate.
Zacks Rank: Edward Lifesciences carries a Zacks Rank #3 (Hold), but this alone isn’t enough to increase the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Molina Healthcare Inc. (MOH - Free Report) has an Earnings ESP of +5.33% and a Zacks Rank #2.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +4.97% and a Zacks Rank #2.
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Edward Lifesciences (EW): What's in Store in Q4 Earnings?
Edward Lifesciences Corp. (EW - Free Report) is scheduled to report fourth-quarter and full-year 2016 earnings results after market close on Feb 1, 2017.
Last quarter, the company’s earnings were in line with the Zacks Consensus Estimate. It is worth noting that Edward Lifesciences has outperformed the Zacks Consensus Estimate in three of the preceding four quarters with an average positive earnings surprise of 5.73%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
Edward Lifesciences posted a strong global sales performance in the third quarter, primarily buoyed by strong Transcatheter Heart Valve sales. Banking on continued strong therapy adoption across all geographies with notable strength in the U.S. and Japan, Edwards is expected to maintain this growth momentum in the fourth quarter as well.
Edwards Lifesciences Corporation Price and EPS Surprise
Edwards Lifesciences Corporation Price and EPS Surprise | Edwards Lifesciences Corporation Quote
Management is especially encouraged by the strong adoption of TAVR in Japan, with the rollout of SAPIEN 3, expected to be completed during the fourth quarter. In Europe, the company expects strong procedure growth across most of countries. Also, based on revised clinical guidelines and updated reimbursement policies in Europe, we are currently looking forward to gradual expansion of SAPIEN 3 that received an intermediate risk indication lately. All these catalysts are expected to factor the company’s topline performance from the fourth quarter itself.
The company has recently disclosed that it is investing aggressively in research and development to generate transformational new TAVR products to further distinguish its leadership position. We believe this endeavor will help the company to bolster its position further in the global TAVR space. However, it expects fourth-quarter results to be impacted on resumed shipments. However, management expects this to return to a near normal run rate by year-end. Transcatheter Heart Valve sales for the fourth quarter are expected to be in the range of $415 million to $430 million, consistent with the earlier guidance.
Coming to surgical heart valve, like the third quarter, Edwards expects this segment to perform dull in the fourth quarter as well. Recently, in an investors meet, the company noted that its fourthquarter sales are trending toward the lower end of the previously stated $750 million to $790 million guidance, primarily due to disappointing Surgical Heart Valve Therapy sales.
According to the company, the continued strong adoption of TAVR therapy has partially marred surgical heart valve solutions growth in the U.S. and Europe. However, according to the company, regions with less TAVR penetration should continue to deliver strong growth.
Also, management expects significant contribution from the launch of INTUITY Elite valve system, a rapid deployment device for surgical aortic valve replacement in the U.S. Under the same group, another of the company’s products got CE marked – INSPIRIS RESILIA aortic valve – the first in a new class of resilient heart valves. This strategic portfolio expansion is expected to get reflected in the forthcoming quarter’s top-line performance.
Edwards Lifesciences has been performing well in its critical care product segment for quite some time now. Meanwhile, the recent CE mark for its Acumen Hypotension Probability Indicator (HPI) is likely to help the company expand in the critical care equipment market in Europe. Management expects to maintain the first-half sales momentum at this segment, going forward.
In this regard we note that, the company continues to invest in R&D which is expected to account for approximately 15% and 16% of sales in the fourth quarter.
Estimate Revision Trend
If we observe the estimate revision trend over the past one month, we can see that it is moving down with one estimate going south and none going at the opposite direction. However, the magnitude of the estimate revision trend is indicating a stable picture with the fourth quarter earnings estimates remaining unchanged at 72 cents, over the last 30 days.
Based on the company’s fundamentals and indefinite estimate revision trend discussed above, we cannot conclusively say that Edwards Lifesciences in going to beat earnings in the quarter.
Earnings Whispers
Our quantitative model also doesn’t point to an earnings beat. Here’s why:
Edward Lifesciences doesn’t have the right combination of the two key ingredients – positive Earnings ESP and a Zacks Rank #3 (Hold) or better – for increasing the odds of an earnings beat.
Zacks ESP: The Earnings ESP for Edward Lifesciences is -1.39%. This is because the Most Accurate estimate of 71 cents remains a penny short of the Zacks Consensus Estimate.
Zacks Rank: Edward Lifesciences carries a Zacks Rank #3 (Hold), but this alone isn’t enough to increase the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Cempra Inc. has an Earnings ESP of +15.79% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Molina Healthcare Inc. (MOH - Free Report) has an Earnings ESP of +5.33% and a Zacks Rank #2.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +4.97% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see specific recommendations to help you pick today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>