On July 24, 2024, Edwards Lifesciences Corp (EW, Financial) released its 8-K filing detailing its financial results for the quarter ended June 30, 2024. The company, a leader in medical devices for structural heart disease, reported mixed results with a notable performance in its Transcatheter Mitral and Tricuspid Therapies (TMTT) segment, but underwhelming growth in Transcatheter Aortic Valve Replacement (TAVR) sales.
Company Overview
Spun off from Baxter International in 2000, Edwards Lifesciences designs, manufactures, and markets a range of medical devices and equipment for advanced stages of structural heart disease. It has established itself as a leader across key products, including surgical tissue heart valves, transcatheter valve technologies, surgical clips, and catheters. The firm derives about 55% of its total sales from outside the US.
Performance and Challenges
Edwards Lifesciences reported Q2 sales of $1.39 billion, reflecting a 7% growth year-over-year, or 8% on a constant currency basis. However, the company’s earnings per share (EPS) of $0.61 fell short of the analyst estimate of $0.69. Adjusted EPS came in at $0.70, slightly above expectations. The revenue of $1.39 billion fell short of the estimated $1.65 billion.
CEO Bernard Zovighian commented,
Second quarter total company sales growth of 8 percent reflected strong contributions from our rapidly growing TMTT product group, offset by lower-than-expected growth in TAVR."
Financial Achievements
Edwards Lifesciences' TMTT segment saw a remarkable 75% growth, contributing significantly to the company's overall performance. The introduction of the EVOQUE tricuspid replacement system and the PASCAL repair system has been well-received, with strong adoption in both the U.S. and Europe.
In contrast, TAVR sales grew by only 5%, or 6% on a constant currency basis, reaching $1.0 billion. The company faced regional pressures and maintained pricing, but the performance of its SAPIEN 3 Ultra RESILIA platform remained strong in the U.S. and Japan.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $1,385.9 million | $1,295.5 million |
| Gross Profit | $1,100.6 million | $1,038.6 million |
| Operating Income | $369.1 million | $263.5 million |
| Net Income | $366.4 million | $254.2 million |
| EPS | $0.61 | $0.42 |
Analysis and Outlook
Despite the mixed results, Edwards Lifesciences remains optimistic about its future growth. The company expects full-year 2024 sales growth of 8 to 10%, although it has lowered its TAVR guidance to 5 to 7% from the previous 8 to 10%. The TMTT guidance has been increased to the higher end of $320 to $340 million.
Edwards Lifesciences continues to invest in its structural heart innovations and clinical trials, such as the PROGRESS and EARLY TAVR trials, which could significantly impact the treatment of aortic stenosis patients. The company is also engaged with the Centers for Medicare & Medicaid Services (CMS) on coverage for the EVOQUE system, which could enhance patient access to this breakthrough therapy.
For Q3 2024, the company anticipates sales of $1.56 to $1.64 billion and EPS of $0.67 to $0.71, assuming the inclusion of Critical Care for the entire quarter.
Overall, while Edwards Lifesciences faces challenges in its TAVR segment, its strong performance in TMTT and ongoing innovations position it well for sustainable growth in the coming years.
Explore the complete 8-K earnings release (here) from Edwards Lifesciences Corp for further details.
