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Abiomed (ABMD) Beats on Q2 Earnings, Lowers FY22 Guidance

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  • ABMD
  • DGX
  • MASI
  • ABT

Abiomed, Inc. ABMD delivered adjusted earnings per share (“EPS”) of $1.03 in the second quarter of fiscal 2022, up 1.9% year over year. The figure surpassed the Zacks Consensus Estimate by 5.1%.

GAAP loss per share for the quarter was $1.24, reflecting an 8.8% plunge from the year-earlier figure.

Revenues in Detail

Abiomed registered revenues of $248.1 million in the fiscal second quarter, up 18.3% year over year. The figure, however, marginally lagged the Zacks Consensus Estimate by 0.1%.

The top line was driven by strength in the company’s Impella heart pump product revenues across the world.

Q2 in Detail

Worldwide Impella heart pump product revenues for the quarter totaled $235.8 million, an increase of 18.1% from the prior-year quarter.

U.S. Impella product revenues totaled $189.8 million, reflecting a rise of 16.3% year over year. Per management, U.S. patient usage of the Impella heart pumps rose 8% in the quarter.

Outside the United States, Impella product revenues totaled $46 million, highlighting an increase of 26% year over year. Japan product revenues improved 18% year over year to $11.8 million while Europe product revenues for the quarter totaled $31.3 million, up by 27.8% compared with the prior-year quarter.

Abiomed, Inc. Price, Consensus and EPS Surprise

Abiomed, Inc. Price, Consensus and EPS Surprise
Abiomed, Inc. Price, Consensus and EPS Surprise

Abiomed, Inc. price-consensus-eps-surprise-chart | Abiomed, Inc. Quote

Margin Trend

In the quarter under review, Abiomed’s gross profit rose 19.4% to $204.3 million. Gross margin expanded 78 basis points (bps) to 82.3%.

Selling, general & administrative expenses rose 29.8% to $102.8 million. Research and development expenses went up 34.5% year over year to $41 million. Adjusted operating expenses of $143.8 million increased 31.1% year over year.

Adjusted operating profit totaled $60.4 million, reflecting a 1.5% fall from the prior-year quarter. Adjusted operating margin in the fiscal second quarter contracted 489 bps to 24.4%.

Financial Position

Abiomed exited the fiscal second quarter of 2022 with cash and cash equivalents of $ 241.9 million compared with $175.5 million at the end of fiscal 2022 first quarter.

The balance sheet was debt free as of Sep 30, 2021.

Guidance

Abiomed has lowered its previously provided financial outlook for the full fiscal year primarily due to the surge in infection with the Delta variant and the U.S. hospital labor shortages.

The company now anticipates global revenues in the range of $1,010 million-$1,030 million, representing 19-22% growth from the comparable reported figure of fiscal 2021. This is lower than the earlier-provided outlook of $1,030 million-$1,050 million, representing an uptick of 22-24% from the comparable reported figure of fiscal 2021. The Zacks Consensus Estimate for the same is currently pegged at $1.04 billion.

Our Take

Abiomed exited the second quarter of fiscal 2022 with better-than-expected earnings. The company saw strength in its global Impella revenues, which is impressive. In August, Abiomed’s Impella ECP expandable percutaneous heart pump received the FDA’s breakthrough device designation. In June, the company’s Impella RP with SmartAssist had received the FDA’s pre-market approval as safe and effective to treat acute right heart failure for up to 14 days. Abiomed’s June buyout of the remaining interest of preCARDIA, which will complement the former’s product portfolio to expand options for upstream heart failure patients acutely decompensating. These developments raise our optimism on the stock.

Notably, the company continued to witness a deleveraged balance sheet in the quarter under review. Expansion of gross margin also bodes well for the stock.

However, lower-than-expected revenues in the quarter is disappointing. Contraction of operating margin also does not bode well. A lowered full-year revenue outlook also raises our apprehension. Stiff competition and forex woes continue to bother Abiomed.

Zacks Rank and Stocks to Consider

Abiomed currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, Abbott Laboratories ABT, and Masimo Corporation MASI.

Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $3.96, which beat the Zacks Consensus Estimate by 33.8%. Third-quarter revenues of $2.77 billion outpaced the consensus mark by 12.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Abbott reported third-quarter 2021 adjusted EPS of $1.40, which surpassed the Zacks Consensus Estimate by 52.2%. Third-quarter revenues of $10.93 billion outpaced the Zacks Consensus Estimate by 15.3%. It currently carries a Zacks Rank #2.

Masimo reported third-quarter 2021 adjusted EPS of 94 cents, surpassing the Zacks Consensus Estimate by 3.3%. Revenues of $307.4 million surpassed the Zacks Consensus Estimate by 3.9%. It currently carries a Zacks Rank #2.


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