Edwards Q3 Earnings Disappoint

Revenues fell short of analysts' expectations, sending the company's stock tumbling.

Qmed Staff

The Sapien 3 is Edwards's third-generation TAVR device.

Edwards Lifesciences's revenue fell short of expectations in the third quarter of 2016, and the disappointment sent the company's stock price down more than 17% the day after its earnings call.

But, as one analyst mused on the call, Edwards appears to be a "victim of [its] own success" after besting its own and Wall Street's revenue expectations for the past nine consecutive quarters and topping earnings predictions 13 straight quarters. While overall sales climbed 18% and the company's transcatheter heart valve sales jumped 37% year over year, analysts were nonetheless underwhelmed.

"At first blush, the [Edwards] quarter was a disappointment . . ." Joanne Wuensch, of BMO Capital Markets, wrote in a research note.

Despite the miss, Wall Street appears to remain confident in the transcatheter aortic valve replacement (TAVR) opportunity, and Edwards's program specifically. 

"In our view, the total addressable market for TAVR is intact, and we continue to believe the global market will top $5B by 2021 with [Edwards] retaining a market-leading position," Leering Research analyst Danielle Antalffy wrote.

According to a Seeking Alpha transcript of the earnings call, Edwards chairman and CEO Mike Mussallem said sales of the company's Sapien 3 TAVR device are on track to beat Edwards's initial estimates by more than $300 million.

Mussallem also provided an update on Edwards's transcatheter mitral valve replacement program. A CE Mark trial was delayed due to regulatory challenges but is "expected to begin soon," he said.

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