(By Balaseshan) Edwards Lifesciences Corp. (NYSE: EW) reported a 34.1 percent jump in quarterly earnings on the favorable impact of foreign exchange and an improved product mix. Despite revenue missing consensus, earnings exceeded Street expectations.
Earnings for the third quarter were $69.2 million, or $0.58 per share, up from $51.6 million, or $0.43 per share, last year. Adjusted EPS rose to $0.58 from $0.38.
Net sales increased 8.5 percent to $447.9 million. Sales growth excluding the impact of foreign exchange was 14.3 percent.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.56 per share on revenue of $448.17 million.
Product-wise, sales from total surgical heart valve therapy declined 2.5 percent to $185.7 million, while transcatheter heart valves sales jumped 49.9 percent to $123.8 million. Total critical care sales decreased 1 percent to $138.4 million.
Region-wise, sales from United States climbed 28.5 percent to $193.6 million, while Europe sales fell 12.5 percent to $121.8 million. Sales from Japan rose 6 percent to $71.8 million, while sales from rest of world grew 9.8 percent to $60.7 million.
"Our 50 percent growth in transcatheter heart valve sales in the quarter was less than we expected. Looking forward, we expect a strong close to the year with today's approval of expanded indications for SAPIEN, now allowing us to serve many more patients," said Michael Mussallem, chief executive of Edwards Lifesciences.
Gross margin improved to 75.1 percent from 69.6 percent.
Research and development for the quarter grew 19.6 percent to $73.8 million, primarily due to the result of investments in clinical trials and new product development efforts in the company's transcatheter valve programs.
Looking ahead into the fourth quarter, the company expects EPS of $0.76 to $0.80 and sales of $490 million to $520 million. Street analysts predict profit of $0.80 per share on revenue of $504.80 million.
For the full year 2012, the company lowered its EPS guidance to range of $2.54 to $2.58 from previous expectations of $2.60 to $2.68. EW now expects full year sales at the bottom of its previous $1.90 billion to $1.97 billion outlook range, which represents an underlying growth rate of more than 15 percent. Analysts predict EPS of $2.57 on revenue of $1.89 billion.
EW closed Friday's regular session down 0.69 percent at $86.14. The stock has been trading between $61.59 and $110.79 for the past 52 weeks.