Edwards Lifesciences Corporation's EW first-quarter 2022 adjusted earnings per share (EPS) of 60 cents surpassed the Zacks Consensus Estimate by 3.5%. The figure improved 11.1% year over year.
GAAP EPS was 59 cents in the quarter compared with the year-ago EPS of 54 cents, reflecting an improvement of 9.3%.
Sales Details
First-quarter net sales were $1.34 billion, up 10.2% year over year on a reported basis. On an underlying basis, growth was 13%. The metric surpassed the Zacks Consensus Estimate by 2.4%.
Segmental Details
In the first quarter, global sales in the Transcatheter Aortic Valve Replacement (TAVR) product group amounted to $881.3 million, up 11% from the prior-year figure on a reported basis. On an underlying basis, growth was 13.7%. Average selling prices were stable worldwide. Outside the United States, total TAVR sales increased 20% on a year-over-year basis.
Transcatheter Mitral and Tricuspid Therapies sales totaled $27 million, up 65.7% from the prior-year figure on a reported basis. On an underlying basis, the improvement was 73%. The company continued to register strong momentum on increased adoption of the PASCAL platform in Europe.
Surgical Structural Heart sales in the quarter totaled $220.8 million, up 3.7% from the year-ago quarter on a reported basis and 6.3% on an underlying basis. Revenue growth was lifted by increased penetration of premium technologies and procedure growth.
Edwards Lifesciences Corporation Price, Consensus and EPS Surprise
Critical Care sales totaled $212.1 million in the first quarter, up 8.4% from the year-ago quarter on a reported basis and 11% on an underlying basis. The revenue uptick resulted from balanced contributions from all product lines, led by the continued strength of the HemoSphere monitoring platform.
Margins
In the first quarter, gross profit was $1.04 billion, up 12.9%. Gross margin expanded 180 basis points (bps) to 77.7%.
The company-provided adjusted gross margin was 77.8%, reflecting a year-over-year expansion of 80 bps. This increase was primarily driven by the favorable impact of foreign exchange, mainly the strengthening of the dollar against the euro and yen.
Selling, general and administrative expenses rose 11.9% year over year to $370.3 million, primarily driven by field-based personnel-related costs and commercial activities supporting the company's growth.
Research and development expenditures were $228.6 million, up 10.4% year over year. This increase was driven by continued investments in the company's transcatheter innovations, including increased clinical trial activity. These developments drove operating costs by 11.4% to $598.9 million.
During the reported quarter, operating income rose 14.9% year over year to $443 million. Operating margin expanded 135 bps to 33%.
Cash Position
Edwards Lifesciences exited the first quarter of 2022 with cash and cash equivalents and short-term investments of $1.50 billion compared with $1.47 billion recorded at the end of fourth-quarter 2021. Long-term debt was $595.9 million at the end of the first quarter of 2022, up from $595.7 million at the end of the fourth quarter of 2021.
Cumulative net cash provided by operating activities at the end of the first quarter of 2022 was $221 million compared with $195 million a year ago. Capital expenditure for the same period was $73 million compared with $106 million a year ago.
Guidance
The company has provided its second-quarter 2022 guidance.
For the quarter, the company projects total sales in the range of $1.36-$1.44 billion. The Zacks Consensus Estimate for the same is pegged at $1.44 billion.
Adjusted EPS is expected in the band of 61-69 cents. The Zacks Consensus Estimate for the metric is pegged at 65 cents.
The company has reaffirmed its guidance for full-year 2022.
Full-year 2022 sales are expected to grow at a low double-digit rate to $5.50-$6.00 billion. The Zacks Consensus Estimate for the same is pegged at $5.73 billion.
The company continues to expect full-year 2022 adjusted EPS in the range of $2.50-$2.65. The Zacks Consensus Estimate for the metric is pegged at $2.57.
Our Take
Edwards Lifesciences exited the first quarter of 2022 with better-than-expected earnings and revenues. The company registered year-over-year growth in revenues driven by strong sales growth across all four product groups. Continued strong adoption of the PASCAL system across Europe looks encouraging as well. Steady adoption of the premium technologies and procedure growth worldwide along with the recent FDA approval and commercial launch of the MITRIS RESILIA valve buoys optimism. The continued strength of the HemoSphere monitoring platform looks impressive. The company has reaffirmed its full-year 2022 outlook, which is indicative of the continuation of this bullish trend. However, persistent choppy market conditions due to the unrelenting spread of new variants of coronavirus are concerning. The spike in operating costs is worrying as well.
Zacks Rank and Key Picks
Edwards Lifesciences currently carries a Zacks Rank #4 (Sell).
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Computer Programs and Systems CPSI has an Earnings ESP of +1.52% and a Zacks Rank of #1 (Strong Buy). Computer Programs and Systems will release first-quarter 2022 results on May 3. You can see the complete list of today's Zacks #1 Rank stocks here.
Computer Programs and Systems' long-term earnings growth rate is estimated at 14%. CPSI's earnings yield of 8.47% compares favorably with the industry's (7.51%).
Alcon Inc. ALC has an Earnings ESP of +10.04% and a Zacks Rank of #2 (Buy). Alcon is expected to release first-quarter 2022 results on May 3.
Alcon's long-term earnings growth rate is estimated at 14.7%. ALC's earnings yield of 3.08% compares with the industry's (7.01%).
Meridian Bioscience, Inc. VIVO has an Earnings ESP of +26.32% and a Zacks Rank of #2. Meridian Bioscience is scheduled to release second-quarter fiscal 2022 results on May 6.
Meridian Bioscience's long-term historical earnings growth rate is 16.3%. VIVO's earnings yield of 5.23% compares favorably with the industry's 0.89%.
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