By Susan Kelly
Feb 3 Medical device maker Edwards Lifesciences
Corp said on Monday that fourth-quarter net earnings
declined from a year ago due to restructuring charges and costs
for launching its next-generation replacement heart valves.
It also provided a 2014 earnings forecast that was weaker
than some analysts had expected, and its shares slipped in
"The revenue guidance seems to encompass where the consensus
was, but the outlook for earnings was weaker than expected,"
said JMP Securities analyst J.T. Haresco.
Edwards, the first on the U.S. market with a valve that is
implanted in a less-invasive method than traditional open-heart
surgery, faces new competition from Medtronic Inc. The
device heavyweight in January gained U.S. regulatory approval to
sell a competing transcatheter valve, called CoreValve.
Edwards Chief Executive Michael Mussallem said the company
would give a more detailed 2014 outlook after it gains approval
later this year for its next-generation transcatheter valve,
Sapien XT, and assesses the impact of Medtronic's market entry.
Edwards so far has not felt much of Medtronic's presence in
the market, Mussallem told analysts on a conference call. "We're
feeling pretty good at this point. We're certainly ready for
them," he said.
Excluding special items, Edwards' fourth-quarter earnings
topped analysts' expectations on stronger sales of its Sapien
transcatheter heart valves.
The medical device maker said net income fell to $75.8
million, or 68 cents a share, from $91.1 million, or 77 cents a
share, a year earlier.
The company said during the quarter it set aside reserves
for exchanging previously sold products with its new heart
valves once they become available to customers. In the United
States, Edwards expects approval of the Sapien XT valve over the
next few months, Mussallem said. Edwards is also launching a
Sapien 3 valve in Europe.
Excluding charges to restructure its critical care products
business and a write-off related to a prior acquisition, Edwards
earned 91 cents a share.
Fourth-quarter net sales rose 5 percent to $536 million.
Analysts had expected earnings of 82 cents a share on sales
of $533 million, according to Thomson Reuters I/B/E/S.
Sales of transcatheter heart valves, which are threaded into
place with a catheter through the arteries, climbed 14.2 percent
to $183.9 million.
Edwards said it still expects 2014 earnings, excluding
items, in a wide range around $3.00 per share, on sales of $2.05
billion to $2.25 billion.
Analysts on average were looking for 2014 earnings of $3.07
a share on revenue of $2.16 billion.
Edwards' shares, which declined 26 percent last year as
investors braced for new competition from Medtronic, fell 3.4
percent to $62.00 in after-market trading Monday from a close of
$64.17 on the New York Stock Exchange.
The company also said the start of a clinical trial to study
its experimental mitral valve replacement in humans was delayed
as it awaits regulatory approval. Edwards said it expects to
begin the study shortly.