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Will Flagship Impella Drive ABIOMED's (ABMD) Q4 Earnings?

Zacks Equity Research

ABIOMED, Inc. ABMD is scheduled to release fourth-quarter fiscal 2019 results on May 2, before market opens. We believe that despite persistent foreign currency woes, the company is set to gain from its flagship Impella product line.


ABIOMED has average positive earnings surprise of 3.9% for the last four quarters.


Which Way Are Estimates Treading?


The Zacks Consensus Estimate for ABIOMED’s fiscal fourth-quarter earnings is pegged at $1.07, indicating 33.8% improvement year over year. The same for revenues stands at $216.4 million, suggesting an increase of 24.1% year over year.


Let’s see how things are shaping up prior to the earnings release.

ABIOMED, Inc. Price and EPS Surprise

ABIOMED, Inc. Price and EPS Surprise | ABIOMED, Inc. Quote

Impella Likely to Drive Q4 Results


ABIOMED’s flagship product line, Impella, has consistently provided a boost to the top line. Impella, a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart, is expected to drive fourth-quarter results as well.


ABIOMED’s progress with respect to SmartAssist, Impella Connect, IQ Impella Quality Assurance Database, cVAD and NCSI platforms are expected to show on fourth-quarter results. Furthermore, the company's investments in the expansion of products like Impella CP,  Connect, Impella 5.5 and Impella RP are a plus.


It is further encouraging to note that ABIOMED’s Impella Connect received CE Mark earlier this year, adding to its earlier FDA approval. This will expand opportunities for sale in European countries, thereby augmenting international revenues. Impella Connect has been launched in 36 U.S. hospitals.


We believe this will positively impact the quarter-to-be-reported results.


Other Factors to Consider


For the fiscal fourth quarter, the company expects revenues of $218 million, calling for 25% growth on a year-over-year basis, on the back of strong performance by Impella.


ABIOMED further raised its fiscal 2019 guidance.


The company expects revenues of $780 million, up from the previously issued range of $765-$770 million. This suggests an increase of approximately 31% year over year.


This is also indicative of strong top-line performance for the quarter to be reported.


However, fluctuations in currency exchange rates can adversely impact the company’s international sales.


The company has its businesses across Europe and earns primarily in Euro and British pound. Due to the sluggish European economy, international revenues are likely to be affected in the to-be-reported quarter.


What Does Our Model Say?


Our proven model clearly indicates that a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to deliver a positive earnings surprise. However, that is not the case here.


Earnings ESP: ABIOMED has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.


Zacks Rank: ABIOMED carries a Zacks Rank #4 (Sell).Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision. You can see  the complete list of today’s Zacks #1 Rank stocks here.


Stocks Worth a Look


Here are a few stocks from the broader medical space that are likely to post an earnings beat this season.


Cardinal Health CAH has an Earnings ESP of +1.13% and a Zacks Rank #3.


Medidata Solutions MDSO has an Earnings ESP of +12.31% and a Zacks Rank #3.


LHC Group LHCG has an Earnings ESP of +0.56% and a Zacks Rank #3.


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