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ABIOMED (ABMD) Earnings Beat Estimates in Q3, Revenues Miss

Zacks Equity Research
·4-min read

ABIOMED, Inc. ABMD reported third-quarter fiscal 2020 earnings per share (EPS) of $1.51, outpacing the Zacks Consensus Estimate of $1.09. The figure surged 55.7% year over year.

The Zacks Rank #4 (Sell) company’s revenues came in at $221.6 million, which lagged the Zacks Consensus Estimate of $227 million. However, the metric improved 10.5% from the prior-year quarter.

Q3 in Detail

U.S. Impella product revenues totaled $185.6 million, showing an increase of 8% year over year. Per management, U.S. patient usage of the Impella heart pumps rose 5% in the quarter.

Outside the United States, Impella product revenues totaled $36 million, highlighting an increase of 29% year over year. Japan revenues were $8.7 million in the quarter, up a substantial 61% year over year.

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ABIOMED, Inc. Price, Consensus and EPS Surprise

 

ABIOMED, Inc. Price, Consensus and EPS Surprise
ABIOMED, Inc. Price, Consensus and EPS Surprise

ABIOMED, Inc. price-consensus-eps-surprise-chart | ABIOMED, Inc. Quote

Margin Trend

In the quarter under review, gross profit totaled $181.6 million, up 9% year over year. Gross margin in the quarter was 81.9% of net revenues, down 110 basis points (bps) year over year. Research & Development (R&D) costs grossed $25.7 million, up 7.1% year over year.

Operating income totaled $70.3 million, up 12.7% on a year-over-year basis. Operating margin was 31.7%, up 60 bps.

Financial Condition

ABIOMED’s balance sheet is debt free. The company ended the fiscal third quarter with $595.5 million of cash and marketable securities.

Guidance

For fiscal 2020, ABIOMED expects revenues within $846-$877 million, mirroring an increase of 10-14%. This compares to the earlier-projected range of $885-$925 million, calling for an increase of 15-20% year over year.

The company continues to expect operating margin within 28-30%.

Summing Up

ABIOMED exited the fiscal third quarter on a mixed note. The company continues to gain from its flagship Impella, which saw a strong quarter. Impella’s patient success stories and increasing global adoption are added positives. Revenues from Japan skyrocketed in the quarter. Expansion in the operating margin, recent product launches and regulatory approvals buoy optimism. Also, the company’s balance sheet is debt-free. On the flip side, the drop in gross margin is concerning. ABIOMED has slashed its revenue guidance for fiscal 2020.

Earnings of Other MedTech Majors at a Glance

Some better-ranked stocks, which reported solid results this earnings season, are Stryker Corporation SYK, Accuray Incorporated ARAY and IDEXX Laboratories, Inc. IDXX. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Fourth-quarter reported revenues of $4.13 billion surpassed the Zacks Consensus Estimate by 0.7%. The company carries a Zacks Rank #2 (Buy).

Accuray reported second-quarter fiscal 2020 adjusted EPS of a penny, comparing favorably with the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.

IDEXX Laboratories reported fourth-quarter 2019 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate of 91 cents by 14.3%. Revenues were $605.4 million, surpassing the Zacks Consensus Estimate by 0.9%. The company carries a Zacks Rank of 2.

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