Sign in

    Edwards Lifesciences (EW)

    Q1 2024 Earnings Summary

    Reported on Jan 10, 2025 (After Market Close)
    Pre-Earnings Price$88.01Last close (Apr 25, 2024)
    Post-Earnings Price$87.00Open (Apr 26, 2024)
    Price Change
    $-1.01(-1.15%)
    • Strong growth in Critical Care segment with a 14% increase in Q1, leading to a raised full-year guidance to 8% to 10% growth, indicating robust demand across all product lines.
    • Launch of innovative products like SAPIEN 3 Ultra RESILIA in Europe is expected to drive growth and normalize European performance after temporary softness, maintaining Edwards' market-leading position with unique dry RESILIA technology.
    • Edwards' TAVR growth in the U.S. outpaced global growth, with procedures accelerating throughout the quarter, and the company is confident in achieving 8% to 10% TAVR sales growth for the full year, indicating recovery from the disruptive years of COVID.
    • Edwards Lifesciences experienced lower-than-expected TAVR sales growth in Europe, attributed to aggressive pricing from competitors leading to trialing, which may signal ongoing competitive pressures in this key market. ,
    • The strong 14% revenue growth in the Critical Care segment may not be sustainable, as management noted the high variability of demand due to capital sales and distributor sales, and expressed caution about projecting this growth forward.
    • Despite raising revenue guidance, Edwards did not raise EPS guidance, citing uncertainty about maintaining a favorable tax rate and potential pressures on profitability, indicating concerns about margins and earnings growth.
    1. TAVR Growth Outlook
      Q: Will TAVR growth accelerate this year?
      A: Management expects TAVR procedures to ramp up, with Q2 growth higher than Q1 and even stronger growth in the second half of the year. This confidence is driven by patient activation efforts and market improvements.

    2. European TAVR Performance
      Q: Why was European TAVR growth lower?
      A: European TAVR growth was below expectations due to aggressive competitor pricing leading to trialing and the loss of billing days. However, the launch of S3UR in Europe is anticipated to normalize growth through the year.

    3. Revenue vs. EPS Guidance
      Q: Why didn't EPS guidance increase with revenue?
      A: Despite raising revenue guidance by nearly $150 million, EPS guidance remained unchanged because of a lower-than-expected tax rate in Q1 and plans to invest more in field resources and patient access initiatives, keeping SG&A at the high end of 29%-30% of sales.

    4. Increased SG&A Expenses
      Q: How will higher SG&A spending affect margins?
      A: SG&A expenses will be at the top end of the original 29%-30% range due to increased investments in field resources and patient access initiatives. This strategic spending impacts EPS guidance, which remains unchanged despite higher revenues.

    5. EVOQUE Commercialization and Reimbursement
      Q: Is reimbursement a barrier for EVOQUE?
      A: The New Technology Add-on Payment (NTAP) expected to start on October 1 will help cover incremental costs of EVOQUE procedures. While NTAP will have a significant impact next year, management anticipates continued interest and patient growth prior to that.

    6. Critical Care Segment Growth
      Q: What's driving Critical Care growth?
      A: Critical Care experienced a 14% revenue increase due to variability in demand across product lines and distributor sales. Guidance was raised to 8%-10%, but further increases are tempered by this variability.

    7. U.S. TAVR Market Recovery
      Q: Has the U.S. TAVR market recovered after COVID?
      A: Management believes the U.S. TAVR market is recovering, with procedures accelerating and COVID impacts diminishing. They are pleased with the progression and excited about long-term growth.

    8. Impact of AHA Initiative
      Q: How will AHA's program affect TAVR volumes?
      A: Partnering with the AHA to implement a quality metric aiming to treat patients within 90 days of diagnosis could dramatically improve patient care and increase TAVR volumes by reducing delays.

    9. EVOQUE and PASCAL Portfolio
      Q: Is EVOQUE boosting PASCAL sales?
      A: There is no significant pull-through from EVOQUE to PASCAL yet. However, offering both repair and replacement technologies is important for treating diverse patient needs and reinforces market leadership.

    10. Response to SMART Trial Results
      Q: How does the SMART trial affect outlook?
      A: Management maintains confidence in their platform, viewing valve selection as multifactorial. They emphasize their commitment to advancing science and treating underdiagnosed patients through groundbreaking research.

    Research analysts covering Edwards Lifesciences.