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What's in Store for Edwards Lifesciences' (EW) Q2 Earnings?

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Edwards Lifesciences Corporation (EW - Free Report) is slated to report second-quarter 2019 results on Jul 23, after market close. The company delivered positive earnings surprises in the trailing four quarters, the average beat being 5.8%.

Let's see how things are shaping up prior to this announcement.

Which Way Are Estimates Treading?

For the second quarter, the Zacks Consensus Estimate for earnings stands at $1.33 per share, suggesting a year-over-year rise of 7.26%. The same for revenues is pinned at $1.05 billion, indicating year-over-year growth of 10.7%.

Key Catalysts

Critical Care

The second-quarter results are expected to reflect strength in Edwards Lifesciences’ core Critical Care product group. The segment has been showing solid growth within all product categories since the past few quarters. The company is optimistic about its robust pipeline of innovative Critical Care products.

In fact, the Zacks Consensus Estimate for the segment’s second-quarter revenues is pegged at $181 million, calling for a year-over-year rise of 7.1%.

Management is optimistic about robust demand for the HemoSphere all-in-one monitoring platform, which has been performing well of late. In fact, demand for the platform is expected to drive the Critical Care group throughout 2019. The full-market launch of the platform with the FloTrac System and Acumen Hypotension Predictive Index during the first quarter, should reflect in the company’s to-be-reported quarter results.

Edwards Lifesciences Corporation Price and EPS Surprise

 

Edwards Lifesciences Corporation Price and EPS Surprise

Edwards Lifesciences Corporation price-eps-surprise | Edwards Lifesciences Corporation Quote

We also look forward to the company’s recently-completed acquisition of CASMED, a non-invasive cerebral oximetry monitoring technology company. The integration of this technology into Edwards Lifesciences’ leading hemodynamic monitoring platform is expected to strengthen the company’s dominance in the smart monitoring technology market. We assume that this has started contributing to the company's top line since the second quarter of 2019.

For 2019, the company expects underlying sales growth within Critical Care in the range of 5% to 7%, considering difficult comparisons.

Surgical Structural Heart

Within the Surgical Structural Heart Group, the company is gaining on solid aortic unit volume and continued adoption of its latest premium aortic valves. Strong rollout and the steady adoption of INSPIRIS RESILIA aortic valve across the globe are expected to strongly contribute to the second-quarter top line. 

Edwards Lifesciences expects 2019 underlying sales growth within this segment at the range of 1% to 3%.

The Zacks Consensus Estimate for the segment’s second-quarter revenues is pegged at $219 million, suggesting a year-over-year rise of 15.3%.

Other Factors at Play

Within the Transcatheter Aortic Valve Replacement (TAVR) arm, management is looking to continue treating patients commercially with its Cardioband Mitral and Tricuspid Annual Reduction Therapy. The market launch of the SAPIEN 3 Ultra and CENTERA systems in Europe during the first quarter is expected to contribute to second-quarter revenues as well. The company’s international sales are expected to show growth on continued adoption of TAVR procedures in Japan, driven by SAPIEN 3.

The latest European regulatory approval for PASCAL transcatheter valve repair system, a crucial addition to the Transcather Mitral and Tricuspid Therapies (TMTT) portfolio, is likely to boost segmental performance in the upcoming quarters.

The Zacks Consensus Estimate for TAVR segment revenues stands at $635 million, suggesting an 8.5% year-over-year rise.

Edwards Lifesciences expects strong revenues from Europe owing to the SAPIEN 3 Ultra system launch. The Zacks Consensus Estimate for Europe net sales for the second quarter is pegged at $244 million, calling for a sequential rise of 7%.

In Japan, the company continued to witness TAVR adoption, driven by SAPIEN 3. The Zacks Consensus Estimate for second-quarter net sales in Japan is pinned at $110 million, suggesting a rise of 6.8% year over year.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Edwards Lifesciences has a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination that doesn’t suggest a beat for the company this earnings season. You can see the complete list of today’s Zacks #1  Rank stocks here.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

AmerisourceBergen has an Earnings ESP of +0.67% and a Zacks Rank #2.

DENTSPLY SIRONA (XRAY - Free Report) has an Earnings ESP of +6.95% and a Zacks Rank #1.

Acadia Healthcare Company, Inc. (ACHC - Free Report) has an Earnings ESP of +4.30% and a Zacks Rank #1.

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