Shares of Edwards Lifesciences Corp. slid 11 percent Friday, a day after the heart valve maker posted disappointing revenue numbers for the fourth quarter and an outlook that fell short of expectations.
THE SPARK: The Irvine, Calif., company said Thursday its revenue climbed 9.6 percent to $430.2 million, but that was well below the $446.8 million expected by Wall Street, according to a poll by FactSet.
The company said recent economic turmoil in southern Europe weighed down results.
Edwards also said it expects current quarter earnings of between 47 and 49 cents per share on revenue ranging from $440 million to $460 million. Those numbers were also short of expectations. Analysts were looking for 55 cents per share on $466.7 million in sales.
THE BIG PICTURE: The miss created uncertainty about the company's near-term prospects, though most industry watchers still believe the company is a leader in the sector. Specifically, there were questions about how soon the company's new transcatheter valves might be adopted. The technology was approved by U.S. regulators late last year.
THE ANALYSIS: Jefferies analyst Raj Denhoy noted that the fourth-quarter revenue fell about $17 million below both what he and the consensus was expecting.
He said procedure volume weakness in southern Europe impacted both surgical and transcatheter valves and could persist over the next couple quarters, but growth should normalize in the back half of the year.
Denhoy said shares may be down Friday because the company's quarter was a little "messy," and some investors may be taking profits after recent rally in share prices.
SHARE ACTION: Down 11 percent, or $9.09, to $71.58 in afternoon trading while broader trading indexes climbed more than 1 percent.
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