Edwards Lifesciences Earnings Preview

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Edwards Lifesciences (NYS: EW) came in under analyst estimates last quarter but now has a chance to fix things . The company will unveil its latest earnings Wednesday. Edwards Lifesciences provides products and technologies designed to treat advanced cardiovascular disease. Its products are categorized into four main areas: heart valve therapy, critical care, cardiac surgery systems, and vascular.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Edwards Lifesciences with 13 of 24 analysts rating it hold. Analysts like Edwards Lifesciences better than competitor Boston Scientific overall. Six out of 27 analysts rate Boston Scientific a buy compared with 10 of 24 for Edwards Lifesciences. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $405.1 million in revenue this quarter. That would represent a rise of 16.1% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.39 per share. Estimates range from $0.37 to $0.46.

What our community says:
The majority of CAPS All-Stars see EW as a good bet, with 63.6% giving it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars as 74.4% give it an "outperform" rating. Fools are bullish on Edwards Lifesciences, though the message boards have been quiet lately with only 56 posts in the past 30 days. Edwards Lifesciences' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Edwards Lifesciences' profit has risen year over year by an average of 9.1% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.1 percentage points in the last quarter. Revenue rose 18.1% while cost of sales rose 27.3% to $127.8 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

70.4%

71.1%

71.1%

72.5%

Operating Margin

16.5%

19.4%

17.9%

18.2%

Net Margin

13.5%

15.8%

16.5%

13.8%

For all our Edwards Lifesciences-specific analysis, including earnings and beyond, add Edwards Lifesciences to My Watchlist.

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At the time this article was published

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