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Abiomed's (ABMD) Q1 Earnings and Revenues Beat, Margins Up

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·4 min read
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Abiomed, Inc. ABMD delivered adjusted earnings per share (“EPS”) of $1.10 in the first quarter of fiscal 2022, up 89.7% year over year. The figure surpassed the Zacks Consensus Estimate by 3.8%.

GAAP loss per share for the quarter was 59 cents against the year-earlier EPS of 98 cents.

Revenues in Detail

Abiomed registered revenues of $252.6 million in the fiscal first quarter, up 53.2% year over year. The figure surpassed the Zacks Consensus Estimate by 3.6%.

Per management, the top line was driven by record global patient utilization with COVID-19 recovery.

Q1 in Detail

Worldwide Impella heart pump product revenues for the quarter totaled $241.5 million, an increase of 55% from the prior-year quarter.

U.S. Impella product revenues totaled $197.5 million, reflecting a rise of 56% year over year. Per management, U.S. patient usage of the Impella heart pumps rose 43% in the quarter.

Outside the United States, Impella product revenues totaled $44 million, highlighting an increase of 51% year over year. Japan Impella product revenues and service improved 24% year over year to $10.9 million.

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 60.9% to $207.4 million. Gross margin expanded 394 basis points (bps) to 82.1%.

Selling, general & administrative expenses rose 51.2% to $103.5 million. Research and development expenses went up 43.1% year over year to $37.7 million. Adjusted operating expenses of $141.2 million increased 48.9% year over year.

Adjusted operating profit totaled $66.2 million, reflecting a 94.3% surge from the prior-year quarter. Adjusted operating margin in the fiscal first quarter expanded 555 bps to 26.2%.

Financial Position

Abiomed exited the fiscal first quarter of 2022 with cash and cash equivalents of $175.5 million compared with $232.7 million at the end of fiscal 2021.

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

Guidance

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

The company now anticipates global revenues in the range of $1,030 million-$1,050 million, representing 22-24% growth from the comparable reported figure of fiscal 2021. This is significantly up from the earlier-provided outlook of $990 million-$1,030 million, representing an uptick of 17-22% 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 first quarter of fiscal 2022 with better-than-expected results. The company saw strength in its global Impella revenues, which is impressive. In June, Abiomed’s Impella RP with SmartAssist received the FDA’s pre-market approval as safe and effective to treat acute right heart failure for up to 14 days. The company also acquired 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 witnessed a deleveraged balance sheet in the quarter under review. Expansion of both margins also bodes well for the stock. A raised full-year revenue outlook also buoys our optimism.

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 in the broader medical space that have announced their quarterly results are Encompass Health Corporation EHC, West Pharmaceutical Services, Inc. WST and Hill-Rom Holdings, Inc. HRC.

Encompass Health, carrying a Zacks Rank #1 (Strong Buy), reported second-quarter 2021 adjusted EPS of $1.17, which beat the Zacks Consensus Estimate by 15.8%. Second-quarter revenues of $1.3 billion outpaced the consensus mark by 1.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

West Pharmaceutical reported second-quarter 2021 adjusted EPS of $2.46, which surpassed the Zacks Consensus Estimate by 41.4%. Second-quarter revenues of $723.6 million outpaced the Zacks Consensus Estimate by 8.7%. The company currently carries a Zacks Rank #2 (Buy).

Hill-Rom reported third-quarter fiscal 2021 adjusted EPS of $1.38, which beat the Zacks Consensus Estimate by 2.9%. Fiscal third-quarter revenues of $717.7 million outpaced the consensus mark by 1.6%. It currently carries a Zacks Rank #2.


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