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Will Flagship Impella Drive ABIOMED's (ABMD) Q3 Earnings?

Zacks Equity Research

ABIOMED, Inc. ABMD is scheduled to release its third-quarter fiscal 2019 results on Jan 31. We believe the company is set to gain from its flagship Impella product line.

Q2 Results at a Glance

ABIOMED reported second-quarter fiscal 2019 earnings of 81 cents per share, which surpassed the Zacks Consensus Estimate by 11%. Adjusted earnings skyrocketed 84.1% from the year-ago quarter’s tally.

Revenues came in at $181.8 million, outpacing the Zacks Consensus Estimate of $175.3 million. The top line also increased 36.9% from the prior-year quarter’s figure.

In the trailing three quarters, ABIOMED delivered average positive earnings surprise of 18.8%.  

ABIOMED, Inc. Price and Consensus


ABIOMED, Inc. Price and Consensus | ABIOMED, Inc. Quote

Which Way Are Q3 Estimates Treading?

The Zacks Consensus Estimate for ABIOMED’s third-quarter earnings is pegged at 94 cents, mirroring 34.3% improvement year over year. The same for revenues stands at $200.6 million, reflecting an increase of 30.2% year over year.

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

Impella Likely to Drive Q3 Results

ABIOMED’s flagship product line, Impella, has consistently provided a boost to the top line. Impella is a support system of percutaneous, catheter-based devices offering hemodynamic support to the heart. In the last reported quarter, Impella contributed 96.4% to ABIOMED’s net sales. Meanwhile, U.S. Impella revenues rose 38% to $175.3 million on a year-over-year basis.

Notably, ABIOMED has been progressing well with SmartAssist, Impella Connect, IQ Impella Quality Assurance Database, cVAD and NCSI platforms. Furthermore, there is a growing physician awareness on Impella's ability to protect against acute kidney injury.

Other Factors at Play

Preliminary Results for Q3

ABIOMED recently announced preliminary results for third-quarter fiscal 2019. Revenues are anticipated to come in at $200.6 million, up 30% year over year.

ABIOMED expects to see a solid contribution from its core Impella product line. Per management, domestic revenues from Impella products are expected to surge 27% on a year-over-year basis to $165.5 million. In the quarter under review, U.S. patient usage is anticipated to improve 24%. Outside the United States, Impella product revenues are projected to be $27.5 million, up 59% year over year.

The quarter also witnessed strong sales in Germany and Japan. Moreover, ABIOMED’s Impella utilization is accelerating at a remarkable pace, with an increasing number of hospitals and customer sites purchasing the same.

These apart, ABIOMED raised its fiscal 2019 guidance. For the fiscal year, the company expects revenues to be approximately $780 million, up from $765-$770 million projected earlier. This shows an increase of 31% from the prior-year figure.

Lucrative Market Trends for CHD

We believe that ABIOMED will have a strong foothold in the coronary heart diseases market in the United States. Increasing popularity of ABIOMED’s products to reduce patient recovery time is saving hospitalization costs.

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. This is precisely the case here.

Earnings ESP: ABIOMED has an Earnings ESP of +2.60%. 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 #2.

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Stocks Worth a Look

Here are a few medical stocks worth considering as they also have the right combination of elements to post an earnings beat this quarter.

Intuitive Surgical, Inc. ISRG has an Earnings ESP of +2.63% and a Zacks Rank #2.

Illumina, Inc. ILMN has an Earnings ESP of +0.32% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DexCom DXCM has an Earnings ESP of +8.93% and a Zacks Rank #2.

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