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Can Critical Care Aid Edwards Lifesciences (EW) Q4 Earnings?

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Edwards Lifesciences Corporation EW is slated to report fourth-quarter 2019 results on Jan 30, after market close. In the last reported quarter, the company’s earnings of $1.41 exceeded the Zacks Consensus Estimate by 15.6%. The trailing four-quarter earnings beat is 6.7%, on average.

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

Which Way Are Estimates Trending?

For the fourth quarter, the Zacks Consensus Estimate for earnings per share stands at $1.48, suggesting a rise of 26.5% from the year-ago reported figure. The same for revenues is pinned at $1.15 billion, indicating 17.8% growth from the prior-year reported number.

Key Catalysts

Critical Care

The fourth-quarter results are expected to reflect strength in the core Critical Care product group. The segment has been showing solid growth across all product categories and geographies over the last few quarters.

Management is optimistic about robust customer adoption of the HemoSphere all-in-one monitoring platform, particularly in the United States and Europe. As management had stated earlier, demand for the platform is expected to have driven the Critical Care group throughout 2019.

We also look forward to the recently-received FDA clearance to use FORE-SIGHT, a cerebral oximetry technology (from the CASMED acquisition) on HemoSphere. The integration of the full range of technologies with HemoSphere is supposed to have created a unique offering of enhanced recovery tools and predictive analytics capabilities in the field of smart monitoring. This, in turn, is expected to have contributed to the company’s fourth-quarter top line strongly.

For 2019, the company expects underlying sales growth of 8-10% in Critical Care.

In fact, the Zacks Consensus Estimate for the segment’s fourth-quarter revenues is pegged at $194 million, calling for growth of 8.9% from the year-earlier reported number.

Surgical Structural Heart

Within the Surgical Structural Heart Group, the company is gaining traction from solid aortic unit volume and continued adoption of its latest premium aortic valves. Strong rollout and steady acceptance of the INSPIRIS RESILIA aortic valve across the globe are likely to reflect on fourth-quarter sales.

Edwards Lifesciences projects 2019 underlying sales growth of 1-3% within this segment.

However, sales might have suffered due to lower surgical aortic valve procedures in the United States.

The Zacks Consensus Estimate for the segment’s fourth-quarter revenues is pegged at $201 million, implying a drop of 5.2% from the year-earlier reported figure.

Other Factors at Play

Within the Transcatheter Aortic Valve Replacement (TAVR) arm, the company is expected to have reported strong fourth-quarter numbers on robust therapy adoption across all geographies with notable strength in the United States. The recent FDA indication expansion for SAPIEN 3 and SAPIEN 3 Ultra systems is also expected to have boosted the company’s TAVR revenues in the fourth quarter.

Outside the United states, in November 2019, the company received a CE Mark to expand use of the Edwards SAPIEN 3 transcatheter heart valve for the treatment of patients with aortic stenosis who are at low risk for open-heart surgery. This upside is likely to get reflected in fourth-quarter results.

What Our Model Suggests

Our proven model does not predict an earnings beat for Edwards Lifesciences this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases 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.

Edwards Lifesciences has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1  Rank stocks here.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering from the same space with the right mix of elements to also surpass expectations this earnings season.

DexCom, Inc. DXCM currently has an Earnings ESP of +17.07% and a Zacks Rank #2.

Exact Sciences Corporation (EXAS - Free Report) presently has an Earnings ESP of +12.08% and a Zacks Rank of 2.

Tandem Diabetes Care, Inc. TNDM currently has an Earnings ESP of +27.59% and a Zacks Rank of 1.

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