* U.S. 2nd-quarter sales of Sapien heart valves at $90 mln
* Third-quarter profit outlook below analyst expectations
* Reaffirms full-year earnings, sales forecasts
* Shares rise 1.5 percent in after-hours trading
By Susan Kelly
July 25 Edwards Lifesciences Corp on
Thursday reported a stronger-than-expected second-quarter profit
on solid sales of its replacement heart valves, and its shares
rose in after-hours trading.
But the medical device maker also forecast a third-quarter
profit below Wall Street expectations and left its full-year
outlook unchanged, despite exceeding analysts' estimates for the
Edwards pioneered development of the transcatheter heart
valve as a less-invasive alternative to open-heart surgery for
the replacement of diseased heart valves. The U.S. rollout of
the Sapien valve, which began in late 2011, has been slower than
expected due to the weak economy and other factors.
"U.S. Sapien sales were in line to a tad below the Street,
as the U.S. launch continues to decelerate. Guidance for next
quarter was below consensus, so investors are going to continue
to be nervous on this name," J.P. Morgan analyst Mike Weinstein
Investors were worried after Edwards reported disappointing
first-quarter results due to a slowdown in valve sales that sent
the company's shares plunging. The medical device industry in
general has struggled as consumers have stayed away from doctors
due to unemployment or higher out-of-pocket costs with their
Edwards' Sapien valve launch also was slowed as doctors took
time to familiarize themselves with the procedure and some
hospitals questioned the economics of the technology.
Edwards Chief Executive Michael Mussallem, on a conference
call with analysts, said the company is now focused on educating
hospitals on reimbursement policies for the device and improving
patients' recovery periods.
Irvine, California-based Edwards said second-quarter net
income rose to $94.1 million, or 82 cents per share, from $67.8
million, or 57 cents per share, a year earlier.
Analysts on average expected 76 cents per share, according
to Thomson Reuters I/B/E/S.
Second-quarter sales increased 7.3 percent to $517 million.
Sales of transcatheter heart valves, which are threaded into
place through an artery via a catheter, climbed 25 percent to
$182 million. U.S. sales of the Sapien transcatheter heart valve
were $90 million.
For the third quarter, Edwards is forecasting earnings
excluding special items of 63 cents to 67 cents per share on
total sales of $475 million to $505 million.
Analysts on average were looking for 72 cents per share on
sales of $494 million.
Edwards reaffirmed its full-year outlook for earnings in a
range of $3.00 to $3.10 a share, excluding special items, on
sales of $2.0 billion to $2.1 billion. The outlook excludes any
favorable impact from a court ruling that bars competitor
Medtronic Inc from selling its CoreValve product in
Edwards is developing a smaller, easier-to-implant valve
called Sapien XT. The company said it expects U.S. approval for
the new valve in mid-2014, followed by a rapid market
introduction. The company said it gained approval to sell Sapien
XT in Japan during the quarter, making it the first
transcatheter valve available in that country.
Edwards' shares rose 1.2 percent after hours to $71.50,
after closing at $70.68 on Thursday on the New York Stock