(Reuters) – Edwards Lifesciences Corp on Wednesday slightly raised its annual forecasts for sales and profit, but slower-than-expected revenue growth in the company’s artificial heart valves dragged its shares down 6% after the bell.
Easing staffing issues at U.S. hospitals have boosted non-urgent procedures delayed by the pandemic, but heart surgeries have not recovered as fast as some others, hurting medical device makers banking on a strong rebound.
That is partly because some surgeries require more time for initial diagnosis to completion, which takes four to six months, RBC analyst Shagun Singh told Reuters.
Sales of the company’s Transcatheter aortic valve replacement (TAVR) device, which helps in a type of heart surgery, rose 9% to $992 million in the second quarter. However, the underlying growth rate of 9.8% was lower than the 10.8% increase in the first quarter.
While U.S. growth was roughly consistent with the first quarter, sales outside the country were dragged down by flattish sales in Japan, said Evercore ISI analyst Vijay Kumar.
The company said in a conference call that sales in Japan were still under pressure from lower-than-expected market growth and competitive trialing in the first half of this year.
Edwards lifted its 2023 sales forecast to between $5.9 billion and $6.1 billion, from $5.6 billion to $6.0 billion estimated earlier. The new mid-point is slightly higher than analysts’ estimates of $5.96 billion, according to Refinitiv.
The company tightened its adjusted per-share profit forecast range to between $2.50 and $2.60, compared with $2.48 to $2.60 earlier. Analysts are estimating $2.55.
It expects 2023 sales for its TAVR devices to be between $3.85 billion and $4 billion, compared with its prior forecast of $3.8 billion to $4 billion. That was in line with estimates of $3.9 billion.
In the quarter ended June 30, Edwards’ revenue rose 11% to $1.53 billion, above estimates of $1.50 billion.
Excluding items, it made a profit of 66 cents per share, compared with estimates of 65 cents.
(Reporting by Sriparna Roy in Bengaluru; Editing by Devika Syamnath)
