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ABIOMED (ABMD) Q1 Earnings Top Estimates, Sales Rise in Japan

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ABIOMED, Inc. reported first-quarter fiscal 2020 earnings per share (EPS) of $1, which beat the Zacks Consensus Estimate by a penny. The figure rose 28.2% year over year.

The Zacks Rank #4 (Sell) company’s revenues came in at $207.7 million, missing the Zacks Consensus Estimate of $210.6 million. However, the metric improved 15.4% from the prior-year quarter.

Fiscal Q1 in Detail

Worldwide Impella heart pump revenues in the reported quarter totaled $199.9 million, reflecting an increase of 15% year over year.
U.S. Impella product revenues totaled $168.3 million, an increase of 11% year over year. Per management, U.S. patient usage of the Impella heart pumps rose 13% in the quarter.

Outside the United States, Impella product revenues totaled $31.5 million, highlighting an increase of 44% year over year. Japan revenues were $8.5 million in the quarter, up a substantial 227% year over year.

ABIOMED, Inc. Price, Consensus and EPS Surprise

 

ABIOMED, Inc. Price, Consensus and EPS Surprise

ABIOMED, Inc. price-consensus-eps-surprise-chart | ABIOMED, Inc. Quote

Margin Trend

In the quarter under review, gross profit totaled $170.6 million, up 14.4% year over year. Gross margin in the quarter was 82.1% of net revenues, down 80 basis points (bps) year over year. Research & Development (R&D) costs grossed $23.8 million, up 11.8% year over year.

Operating income totaled $60.7 million, up 30% on a year-over-year basis. Operating margin was 29.2%, up 320 bps.

Financial Condition

ABIOMED’s balance sheet remains debt free. The company ended the fiscal first quarter with $526.7 million of cash and marketable securities.

Guidance Slashed

For fiscal 2020, ABIOMED expects total revenues in the range of $885-$925 million, an increase of 15% to 20% year over year. This range is below the earlier provided guidance range of $900-$945 million, calling for a year-over-year increase of 17-23%. The Zacks Consensus Estimate for the same stands at $925.3 million, slightly above the projected range.

Summing Up

ABIOMED exited the fiscal first quarter on a mixed note. The company continues to gain from its flagship Impella, which saw a strong quarter. Impella’s patient success stories and increasing global adoptions are added positives. Revenues from Japan skyrocketed in the quarter. Considerable expansion in the operating margin buoys optimism. Meanwhile, surging R&D expenses show increasing focus on innovation. Recent product launches and regulatory approvals buoy optimism. Considerable expansion in operating margin is a positive.

On the flip side, the drop in gross margin is disheartening. A slashed guidance for fiscal 2020 adds to the woes.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks, which posted solid results this earnings season, are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Its revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Its revenues of $2.84 billion outpaced the Zacks Consensus Estimate of $2.79 billion by 1.9%. The company currently has a Zacks Rank #2.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Its revenues of $1.1 billion surpassed the Zacks Consensus Estimate of $1.03 billion. The company sports a Zacks Rank #1 at present.

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