We try to avoid too much coverage of company financials unless they tell us something really meaningful. Edwards Lifesciences Corporation is one of those companies we follow avidly because of its leadership position in transcatheter valve development. It’s interesting to see the company reporting a sales increase of over eight percent compared with a year ago (10% on constant currency basis), yet still sounding disappointed that it missed its projections. Looking forward it’s watered things down a bit too.
Like night follows day we expected Edwards sales numbers, especially of its transcatheter offering, climbing healthily. The question of course is how to forecast that growth, and it seems the people at Edwards might have been a tiny bit rose-tinted when they did their projections.
Looking a little more closely at the sales numbers, traditional (surgical) valves predictably shrank a bit, and transcatheter valves, termed THVs by Edwards, grew nicely to $169.7 million for the quarter, a 39.7 percent growth rate over the first quarter last year driven by the ongoing U.S. launch of the SAPIEN valve. Total U.S. sales were $83.0 million including net stocking orders of $6.0 million and clinical sales of $6.7 million. Outside the U.S., THV sales grew 7.6 percent.
On the net income front the company reported $144.9 million for the quarter ended March 31, 2013, compared to $65.1 million for the same period last year. However the company benefited to the tune of $83.6 million, a special pre-tax gain which was an initial payment from Medtronic related to ongoing U.S. Andersen patent litigation.
Excluding this and other, non-GAAP income, diluted earnings per share grew 35.8 percent from prior year to $0.72.
“The ongoing adoption in the U.S. drove global transcatheter valve growth of 40 percent,” said Michael A. Mussallem, chairman and CEO. “Our THV clinical results continue to be very positive and we are making good progress on our pipeline of new products that we believe will enable us to strengthen our leadership position. Yet, as global sales this quarter across product lines were below our expectations, we are lowering our 2013 guidance primarily to reflect a slower start to the year and an updated foreign exchange impact.”
“We now expect our 2013 global THV sales to grow 25 to 30 percent on an underlying basis. This would result in expected sales of $670 million to $750 million, which includes $350 million to $400 million of sales in the U.S.,” Mussallem said. “Our estimate of the size of the U.S. transcatheter valve opportunity for the longer term remains unchanged.”
Find the entire press release here.
Source: Edwards Lifesciences Corporation