Edwards Lifesciences ($EW) reported robust results in the 2013 second quarter, crediting transcatheter heart valves, particularly its surging Sapien device, for generating much of its soaring sales and net income.
Transcatheter heart valves produced $182 million in revenue for the quarter, a 25% increase over the 2012 second quarter. And Sapien's ongoing U.S. launch generated about $90 million of that. It's likely that Sapien's ability to accelerate revenue growth will reach even higher now that Edwards has gained Japanese approval for Sapien XT, the first commercially available transcatheter valve in that country.
Overall, second quarter net sales increased 7.3% to $517.2 million, up from $482 million in the 2012 second quarter. Net income rose to more than $94 million, compared with $67.8 million during the same period last year. That translates to 82 cents per diluted share, versus 57 cents in the 2012 second quarter.
Michael Mussallem, the company's chairman and CEO, said in a statement that the robust second quarter boosted the company's confidence that it would achieve its outlined sales and earnings guidance for 2013: $2 billion to $2.1 billion in full year sales, and earnings per diluted share, excluding special items, of $3 to $3.10.
Even so, the guidance remains slightly lower as of the end of Q1, when executives scaled back their full-year forecast by about 5%. They did so to address an unexpected dip in demand for transcatheter valves. Accordingly, Edwards expects Sapien to expand sales this year by about 30%, to $750 million, instead of an initially anticipated 45% sales growth. That lowered expectation, however small, led to a massive stock drop in May and a $750 million stock buyback designed to reaffirm investor confidence.
Edwards' other numbers were more down-to-earth. The company's surgical heart valve therapy group produced $204 million in sales during the quarter, up 1.9% over Q2 2012 and reflecting steady growth in the U.S. and Europe, the company said. Critical care product group sales, by contrast, produced $131 million in sales, down 3.6%, a trend blamed on a reduction of distributor inventories in China that is expected to rebound in the second half.
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