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Edwards Lifesciences (EW) Q2 Earnings Top Estimates, View Up
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Edwards Lifesciences Corporation (EW - Free Report) delivered adjusted earnings per share (EPS) of 66 cents in second-quarter 2023, beating the Zacks Consensus Estimate by 1.5%. The figure also increased 4.8% year over year.
GAAP EPS was 50 cents in the quarter, down 23.1% year over year.
Sales Details
Second-quarter net sales were $1.53 billion, up 11.4% year over year on a reported basis. The metric topped the Zacks Consensus Estimate by 1.7%.
Segmental Details
In the second quarter, global sales in the Transcatheter Aortic Valve Replacement (TAVR) product group amounted to $991.6 million, up 9.3% year over year. On an underlying basis, growth was 9.8%. In the United States, Edwards' TAVR sales were aided by improved hospital staffing levels and the continued successful launch of SAPIEN 3 Ultra RESILIA. This figure compares with our second quarter’s TAVR model’s projection of $960.6 million.
Transcatheter Mitral and Tricuspid Therapies (TMTT) sales totaled $47.6 million, up 71.4% from the prior-year quarter’s figure on a reported basis. On an underlying basis, the upside was 69.2%. The uptick is driven by overall transcatheter edge-to-edge repair procedure growth and the ongoing launch and growing adoption of the PASCAL Precision system in Europe and the United States. This figure compares with our second quarter’s TMTT model’s projection of $43.2 million.
Surgical Structural Heart sales in the quarter totaled $256.3 million, up 12.2% from the year-ago quarter’s levels on a reported basis and 13.3% on an underlying basis. Growth was driven by the adoption of Edwards' premium products across all regions. This figure compares with our second quarter’s Surgical Structural Heart model’s projection of $230.9 million.
Critical Care sales totaled $234.7 million in the second quarter, up 11.4% from the year-ago quarter’s levels on a reported basis and up 12.8% on an underlying basis. Sales growth was led by the Smart Recovery technology portfolio and strong adoption of the Acumen IQ sensor. This figure compares with our second quarter’s Critical Care model’s projection of $228 million.
Margins
In the second quarter, gross profit was $1.19 billion, up 7.5%. The gross margin contracted 281 basis points (bps) to 77.6%.
The company-provided adjusted gross margin was 77.7%, a 280 basis-point (bps) contraction year over year. This year-over-year reduction was due to a less favorable impact from foreign exchange.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Selling, general and administrative expenses rose 14.6% year over year to $468.7 million. Research and development expenditures were $270.3 million, down 7.8% year over year.
During the reported quarter, operating income rose 0.8% year over year to $448.2 million. The operating margin contracted 308 bps to 29.3%.
Cash Position
Edwards Lifesciences exited second-quarter 2023 with cash and cash equivalents and short-term investments of $1.04 billion compared with $1.25 billion recorded at the end of first-quarter 2023. Long-term debt was $596.7 million at the end of second-quarter 2023 compared with $596.5 million at the end of first-quarter 2023.
Guidance
The company raised its guidance for full-year 2023.
The company expects full-year 2023 adjusted EPS to grow in the range of $2.50-$2.60 (compared with the previous guidance of $2.48-$2.60). The Zacks Consensus Estimate for the metric is pegged at $2.55.
Full-year 2023 sales are expected in the high range of $5.90-$6.10 billion (compared with the previous guidance of $5.60-$6.00 billion). The Zacks Consensus Estimate for the same is pegged at $5.96 billion.
For the third quarter of 2023, Edwards Lifesciences projects total sales in the range of $1.44-$1.52 billion. The Zacks Consensus Estimate for third-quarter revenues is pegged at 1.50 billion.
The adjusted EPS is expected in the band of 55-61 cents. The Zacks Consensus Estimate for third-quarter earnings is pegged at 65 cents.
Our Take
Edwards Lifesciences exited the second quarter of 2023 on a bullish note with better-than-expected earnings and revenues. The company also registered year-over-year growth on both fronts. The company’s TMTT segment was driven by overall transcatheter edge-to-edge repair procedure growth as well as the ongoing launch and growing adoption of the PASCAL Precision system in Europe and the United States. Further, growth within Surgical Structural Heart was lifted by the increased adoption of Edwards’ premium products across all regions. Critical Care also registered growth in the reported quarter led by the Smart Recovery technology portfolio and strong adoption of the Acumen IQ sensor. The company raised its full-year 2023 guidance, which is encouraging too.
However, the contraction of both margins is discouraging. The choppy market conditions due to the persistent foreign exchange impact and stiff competition within the medical device industry is a concern.
Zacks Rank and Other Key Picks
Edwards Lifesciences currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2, reported second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9% You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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Edwards Lifesciences (EW) Q2 Earnings Top Estimates, View Up
Edwards Lifesciences Corporation (EW - Free Report) delivered adjusted earnings per share (EPS) of 66 cents in second-quarter 2023, beating the Zacks Consensus Estimate by 1.5%. The figure also increased 4.8% year over year.
GAAP EPS was 50 cents in the quarter, down 23.1% year over year.
Sales Details
Second-quarter net sales were $1.53 billion, up 11.4% year over year on a reported basis. The metric topped the Zacks Consensus Estimate by 1.7%.
Segmental Details
In the second quarter, global sales in the Transcatheter Aortic Valve Replacement (TAVR) product group amounted to $991.6 million, up 9.3% year over year. On an underlying basis, growth was 9.8%. In the United States, Edwards' TAVR sales were aided by improved hospital staffing levels and the continued successful launch of SAPIEN 3 Ultra RESILIA. This figure compares with our second quarter’s TAVR model’s projection of $960.6 million.
Transcatheter Mitral and Tricuspid Therapies (TMTT) sales totaled $47.6 million, up 71.4% from the prior-year quarter’s figure on a reported basis. On an underlying basis, the upside was 69.2%. The uptick is driven by overall transcatheter edge-to-edge repair procedure growth and the ongoing launch and growing adoption of the PASCAL Precision system in Europe and the United States. This figure compares with our second quarter’s TMTT model’s projection of $43.2 million.
Surgical Structural Heart sales in the quarter totaled $256.3 million, up 12.2% from the year-ago quarter’s levels on a reported basis and 13.3% on an underlying basis. Growth was driven by the adoption of Edwards' premium products across all regions. This figure compares with our second quarter’s Surgical Structural Heart model’s projection of $230.9 million.
Critical Care sales totaled $234.7 million in the second quarter, up 11.4% from the year-ago quarter’s levels on a reported basis and up 12.8% on an underlying basis. Sales growth was led by the Smart Recovery technology portfolio and strong adoption of the Acumen IQ sensor. This figure compares with our second quarter’s Critical Care model’s projection of $228 million.
Margins
In the second quarter, gross profit was $1.19 billion, up 7.5%. The gross margin contracted 281 basis points (bps) to 77.6%.
The company-provided adjusted gross margin was 77.7%, a 280 basis-point (bps) contraction year over year. This year-over-year reduction was due to a less favorable impact from foreign exchange.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Edwards Lifesciences Corporation price-consensus-eps-surprise-chart | Edwards Lifesciences Corporation Quote
Selling, general and administrative expenses rose 14.6% year over year to $468.7 million. Research and development expenditures were $270.3 million, down 7.8% year over year.
During the reported quarter, operating income rose 0.8% year over year to $448.2 million. The operating margin contracted 308 bps to 29.3%.
Cash Position
Edwards Lifesciences exited second-quarter 2023 with cash and cash equivalents and short-term investments of $1.04 billion compared with $1.25 billion recorded at the end of first-quarter 2023. Long-term debt was $596.7 million at the end of second-quarter 2023 compared with $596.5 million at the end of first-quarter 2023.
Guidance
The company raised its guidance for full-year 2023.
The company expects full-year 2023 adjusted EPS to grow in the range of $2.50-$2.60 (compared with the previous guidance of $2.48-$2.60). The Zacks Consensus Estimate for the metric is pegged at $2.55.
Full-year 2023 sales are expected in the high range of $5.90-$6.10 billion (compared with the previous guidance of $5.60-$6.00 billion). The Zacks Consensus Estimate for the same is pegged at $5.96 billion.
For the third quarter of 2023, Edwards Lifesciences projects total sales in the range of $1.44-$1.52 billion. The Zacks Consensus Estimate for third-quarter revenues is pegged at 1.50 billion.
The adjusted EPS is expected in the band of 55-61 cents. The Zacks Consensus Estimate for third-quarter earnings is pegged at 65 cents.
Our Take
Edwards Lifesciences exited the second quarter of 2023 on a bullish note with better-than-expected earnings and revenues. The company also registered year-over-year growth on both fronts. The company’s TMTT segment was driven by overall transcatheter edge-to-edge repair procedure growth as well as the ongoing launch and growing adoption of the PASCAL Precision system in Europe and the United States. Further, growth within Surgical Structural Heart was lifted by the increased adoption of Edwards’ premium products across all regions. Critical Care also registered growth in the reported quarter led by the Smart Recovery technology portfolio and strong adoption of the Acumen IQ sensor. The company raised its full-year 2023 guidance, which is encouraging too.
However, the contraction of both margins is discouraging. The choppy market conditions due to the persistent foreign exchange impact and stiff competition within the medical device industry is a concern.
Zacks Rank and Other Key Picks
Edwards Lifesciences currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories (ABT - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .
Abbott, carrying a Zacks Rank of 2, reported second-quarter 2023 adjusted EPS of $1.08, beating the Zacks Consensus Estimate by 3.8%. Revenues of $9.98 billion outpaced the consensus mark by 2.9% You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 12.4%.
Elevance Health reported second-quarter 2023 adjusted EPS of $9.04, beating the Zacks Consensus Estimate by 2.5%. Revenues of $43.38 billion surpassed the Zacks Consensus Estimate by 4.5%. It currently carries a Zacks Rank #2.
Elevance Health has a long-term estimated growth rate of 12.1%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 2.8%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 14.5%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.