Edwards Lifesciences, a victim of its own success, slides on Q3 sales miss

Edwards Lifesciences (NYSE:EW) saw its share price slide in early trading today after yesterday reporting lower-than-expected sales for the 3rd quarter, a victim, as 1 analyst put it, of its own success.

Irvine, Calif.-based Edwards posted profits of $141.4 million, or 65¢ per share, on sales of $739.4 million, for bottom-line growth of 19.7% on sales growth of 20.1% compared with Q3 2015.

Adjusted to exclude 1-time items, earnings per share were 68, dead even with the consensus estimate on Wall Street. But analysts there were looking for sales of $801.9 million, prompting investors to push EW share prices down -13.5% to $98.38 apiece in after-hours trading yesterday; although the stock was up 44% this year as of the close last night, shares were off -14.0% in early trading today at $97.75 each.

“We are pleased to report strong third quarter underlying sales growth of 18 percent, which was consistent with our increased expectations,” chairman & CEO Michael Mussallem said in prepared remarks. “2016 has been a remarkable year for our company. This performance reflects continued strong global adoption of our Edwards Sapien 3 valve platform, which remains on track to generate over $300 million more in sales than we originally expected for the year. Consistent with our strategy, we are aggressively investing to bring break-through therapies to an even broader group of patients around the world.”

JP Morgan analyst Michael Weinstein told Mussallem during a conference call yesterday that “you’re the victim of your own success, unfortunately.”

“The company has beaten your own expectations and Street expectations on revenues 9 straight quarters and earnings 13 straight. So that’s why you’ve got some consternation on the phone tonight,” Weinstein said, according to a Seeking Alpha transcript.

Mussallem attributed part of the top-line miss to a $5 million hit taken in France, where the government put a cap on transcatheter aortic valve replacements this year.

“We are pleased to be resolving the issue we described last quarter, related to the French policy that effectively limited the number of TAVR procedures in 2016,” he said. “The situation in France was 1 that was unexpected. We didn’t expect it to hit us in the 3rd quarter. So that was a little bit of a curveball, but not much else is off track.”

Edwards raised its full-year earnings guidance, saying it now expects to report adjusted EPS of $2.82 to $2.92, up from prior guidance of $2.78 to $2.88. The company stood fast on its full-year sales outlook for the high end of $2.7 billion to $3.0 billion.

Fourth-quarter adjusted EPS are pegged at 67¢ to 77¢ on sales of $750 million to $790 million.

The post Edwards Lifesciences, a victim of its own success, slides on Q3 sales miss appeared first on MassDevice.

from MassDevice http://ift.tt/2evhraJ