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ABIOMED (ABMD) Earnings Beat, Revenues Miss Estimates in Q2

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ABIOMED, Inc. reported second-quarter fiscal 2020 earnings per share (EPS) of $1.03, beating the Zacks Consensus Estimate of 93 cents. The figure rose 27.2% year over year.

The Zacks Rank #5 (Strong Sell) company’s revenues came in at $205 million, missing the Zacks Consensus Estimate of $206.3 million. However, the metric improved 12.8% from the prior-year quarter.

Q2 in Detail

U.S. Impella product revenues totaled $172 million, showing an increase of 9% year over year. Per management, U.S. patient usage of the Impella heart pumps rose 14% in the quarter, with 62 new sites opened in the country.

Outside the United States, Impella product revenues totaled $33 million, highlighting an increase of 40% year over year. Japan revenues were $9.6 million in the quarter, up a substantial 135%.

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 $170.1 million, up 12% year over year. Gross margin in the quarter was 83% of net revenues, down 60 basis points (bps) year over year. Research & Development (R&D) costs grossed $24 million, up 5.5% year over year.

Operating income totaled $60.2 million, up 19.6% on a year-over-year basis. Operating margin was 29.4%, up 170 bps.

Financial Condition

ABIOMED’s balance sheet is debt free. The company ended the fiscal second quarter with $551.3 million of cash and marketable securities.

Guidance Retained

For fiscal 2020, ABIOMED maintains total revenue projection in the range of $885-$925 million, calling for an increase of 15-20% year over year. The Zacks Consensus Estimate for the same stands at $892.7 million, within the projected range.

Summing Up

ABIOMED exited the fiscal second 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 adoption are added positives. Revenues from Japan skyrocketed in the quarter. Considerable expansion in the operating margin, recent product launches and regulatory approvals buoy optimism. ABIOMED has retained its guidance for fiscal 2020. Also, the company’s balance sheet is debt-free. On the flip side, the drop in gross margin is concerning.

Earnings of Other MedTech Majors at a Glance

Some better-ranked companies, which posted solid results this earnings season, are Edwards Lifesciences (EW - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and ResMed Inc. (RMD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Edwards Lifesciences delivered third-quarter 2019 adjusted EPS of $1.41, outpacing the Zacks Consensus Estimate by 15.6%. Net sales of $1.09 billion surpassed the Zacks Consensus Estimate by 5.5%.

Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which surpassed the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion outpaced the consensus estimate by 1.3%.

ResMed reported fiscal first-quarter 2020 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate of 87 cents by 6.9%. Revenues were $681.1 million, surpassing the Zacks Consensus Estimate by 3.6%.

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