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Abiomed (ABMD) Beats on Q3 Earnings, Narrows FY22 Guidance

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Abiomed, Inc. ABMD delivered adjusted earnings per share (EPS) of $1.13 in the third quarter of fiscal 2022, down 3.4% year over year. The figure surpassed the Zacks Consensus Estimate by 15.3%.

GAAP EPS for the quarter was $1.00, reflecting a 25.9% plunge from the year-earlier figure.

Revenues in Detail

Abiomed registered revenues of $261.2 million in the fiscal third quarter, up 12.7% year over year. The figure beat the Zacks Consensus Estimate by 3.2%.

At constant exchange rate (“CER"), revenues improved 14%.

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

Q3 in Detail

Worldwide Impella heart pump product revenues for the quarter totaled $249 million, an increase of 13% from the prior-year quarter. At CER, revenues improved 14%.

U.S. Impella product revenues totaled $201 million, reflecting a rise of 12% year over year on the back of a 10% surge in patient utilization.

Outside the United States, Impella product revenues totaled $48 million, highlighting an increase of 16% year over year on a reported basis and 22% at CER. Japan product revenues improved 16% year over year on a reported basis (up 27% at CER) to $14 million while Europe product revenues for the quarter totaled $31 million, up by 13% on a reported basis and 18% at CER 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 12.1% to $213.5 million. However, gross margin contracted 49 basis points (bps) to 81.8%.

Selling, general & administrative expenses rose 24.8% to $107.6 million. Research and development expenses went up 23.8% year over year to $40.9 million. Adjusted operating expenses of $148.5 million increased 24.6% year over year.

Adjusted operating profit totaled $65.1 million, reflecting an 8.8% fall from the prior-year quarter. Adjusted operating margin in the fiscal third quarter contracted 589 bps to 24.9%.

Financial Position

Abiomed exited the fiscal third quarter of 2022 with cash and cash equivalents of $144.3 million compared with $241.9 million at the end of fiscal 2022 second quarter.

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

Guidance

Abiomed has narrowed its previously provided financial outlook for the full fiscal year.

The company now anticipates global revenues in the range of $1,025 million-$1,030 million, representing 21-22% growth from the comparable reported figure of fiscal 2021. This is narrower than the earlier-provided outlook of $1,010 million-$1,030 million, representing an uptick of 19-22% from the comparable reported figure of fiscal 2021. The Zacks Consensus Estimate for the same is currently pegged at $1.02 billion.

Our Take

Abiomed exited the third quarter of fiscal 2022 with better-than-expected results. The company saw continued strength in its global Impella revenues, which is impressive. In November 2021, Abiomed announced the final results of the PROTECT III and Restore EF prospective studies, which demonstrate improved outcomes for high-risk PCI patients with the use of Impella heart pumps. This month, the company announced that regulators in three countries granted approvals to Impella surgical products. The same month, Abiomed announced successful results of the first-in-human EFS of the preCARDIA system. These developments raise our optimism on the stock.

Notably, the company continued to witness a deleveraged balance sheet in the quarter under review.

However, year-over-year fall in the bottom line in the quarter is disappointing. Contraction of both margins also does not bode well. Stiff competition and forex woes continue to bother Abiomed.

Zacks Rank and Key Picks

Abiomed currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks that are supposed to report earnings soon are Cerner Corporation CERN, Baxter International BAX and AMN Healthcare Services, Inc. AMN.

The Zacks Consensus Estimate for Cerner’s fourth-quarter 2021 adjusted EPS is currently pegged at 88 cents. The consensus estimate for fourth-quarter 2021 revenues is pegged at $1.49 billion. The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cerner has an estimated long-term growth rate of 12.8%. CERN’s earnings yield of 4% compares favorably with the industry’s negative yield.

Baxter currently has a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $1.03. The consensus estimate for fourth-quarter revenues is pinned at $3.35 billion.

Baxter has an estimated long-term growth rate of 9.5%. BAX’s earnings yield of 4.9% compares favorably with the industry’s negative yield.

AMN Healthcare currently carries a Zacks Rank #2. The Zacks Consensus Estimate for its fourth-quarter 2021 adjusted EPS is currently pegged at $2.58. The consensus estimate for its revenues stands at $1.28 billion.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings yield of 6.4% compares favorably with the industry’s 0.9%.


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