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What's in Store for Edwards Lifesciences (EW) Q2 Earnings?

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Edwards Lifesciences Corporation EW is slated to report second-quarter 2021 results on Jul 29, after market close.

In the last reported quarter, the company’s adjusted earnings per share of 54 cents surpassed the Zacks Consensus Estimate by 14.9%. The company beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 37.31%.

Let's see how things have shaped up prior to this announcement.

Factors at Play

Critical Care

Till the last-reported quarter, the pandemic continued to impact procedural volumes in the segment on lesser hospital and physician office visits. However, with the improving COVID-19 scenario and reopening of economy, the company is likely to have witnessed rebound in its business in the second quarter.

During the last-reported first quarter, Edwards Lifesciences registered growth in HemoSphere orders as hospital spending started to show signs of recovery. We believe this to have continued in the fiscal second quarter of 2021 as well owing to gradual recovery of markets, thus adding to the top line.

Edwards Lifesciences Corporation Price and EPS Surprise

Edwards Lifesciences Corporation Price and EPS Surprise
Edwards Lifesciences Corporation Price and EPS Surprise

Edwards Lifesciences Corporation price-eps-surprise | Edwards Lifesciences Corporation Quote

The products used in high-risk surgeries witnessed high demand in the first quarter along with recovery in ClearSight non-invasive finger cuff demand. This is expected to have continued through the fiscal second quarter on the back of increasing elective procedure demand. These are likely to have contributed significantly to second-quarter revenues.

Management is optimistic about robust customer adoption of the TruWave disposable pressure monitoring devices on increased demand due to elevated hospitalizations in both the United States and Europe. These are likely to be reflected in the second-quarter results.

The Zacks Consensus Estimate for the segment’s second-quarter revenues is pegged at $200 million, implying a rise of 21.9% from the last quarter’s reported figure.

Surgical Structural Heart

Within the Surgical Structural Heart Group, the company is expected to have witnessed continued business recovery during the second quarter as declining COVID-19 cases enabled more hospitals to resume the treatment of surgical structural heart patients. Edwards Lifesciences is optimistic about robust global adoption of its premium RESILIA tissue valves, including the INSPIRIS aortic surgical valve and the KONECT aortic valve conduit. The INSPIRIS valve utilization, similar to the previous quarter, is expected to have continued with strong sales momentum in the second quarter, banking on increased demand by patients.

During the first-quarter earnings call, the company received regulatory approval with reimbursement in Japan for the MITRIS RESILIA valve. The product is likely to have witnessed strong costumer adoption.

The Zacks Consensus Estimate for the segment’s second-quarter revenues is pegged at $215 million, implying a rise of 33.5% from the last reported quarter’s reported figure.

Other Factors at Play

Within the Transcatheter Aortic Valve Replacement arm, the company is expected to have continued to record increased global sales in the second quarter on robust adoption of the SAPIEN valve platform. The company received approval to begin treating patients at low surgical risk in Japan with SAPIEN 3 valves in early April 2021. The development is expected to have contributed significantly to the company’s fiscal second-quarter revenue growth.

The Zacks Consensus Estimate for the segment’s first-quarter revenues is pegged at $853 million, implying a surge of 43.6% from the last quarter’s reported figure.

The company’s Transcatheter Mitral and Tricuspid Therapies segment’s PASCAL transcatheter valve repair system and the newly-introduced PASCAL Ace are likely to have continued their strong momentum in the second quarter. Further, sales proceeds from the progress of both transfemoral EVOQUE and SAPIEN M3 platforms are likely to have contributed to the second-quarter top line.

The Zacks Consensus Estimate for the segment’s first-quarter revenues is pegged at $18.4 million, implying an uptick of 202% from the year-earlier quarter’s reported figure.

The Estimate Picture

The Zacks Consensus Estimate for second-quarter 2021 revenues is pegged at $1.28 billion, suggesting an improvement of 38.6% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for first-quarter 2021 earnings is pegged at 55 cents, indicating a rise of 61.8% from the year-ago quarter’s reported figure.

What Our Model Suggests

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: Edwards Lifesciences 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: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are some medical stocks worth considering as these have the right combination of elements to beat on earnings this reporting cycle.

Hill-Rom Holdings, Inc. HRC currently has an Earnings ESP of +0.56% and a Zacks Rank #2. The stock is slated to release third-quarter fiscal 2021 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein, Inc. HSIC has an Earnings ESP of +0.91% and a Zacks Rank of 2, at present. The stock is expected to release second-quarter 2021 results on Aug 3.

Laboratory Corporation of America Holdings LH has an Earnings ESP of +6.53% and a Zacks Rank of 2, at present. The company is scheduled to release second-quarter 2021 results on Jul 29.


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