NYSE$EW

Edwards Lifesciences Corp · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Edwards Lifesciences' first quarter results were reported with sales growth of nearly 14% despite being significantly impacted by COVID-19.

Edwards Lifesciences reported a 14% increase in sales to $1.1 billion for the first quarter of 2020. Diluted EPS was $1.47, and adjusted EPS grew 14% to $1.51. The company's sales were significantly impacted by COVID-19 in the last few weeks of the quarter, leading to a substantial reduction in 2020 sales and EPS guidance.

  • Sales grew nearly 14% to $1.1 billion.
  • TAVR sales grew 24%; underlying sales grew 25%.
  • EPS was $1.47; adjusted EPS grew 14% to $1.51.
  • Sales were significantly impacted by the effects of COVID-19 the last few weeks of Q1.

Headline financials

Total Revenue

$1.13B

Previous: $993M+13.7%
EPS (adj)

$0.50

Previous: $0.44+13.6%
Gross Profit Margin

76.5%

Previous: 76.7%-0.3%
SG&A Expenses

308000000.0%

No prior period
R&D Expenses

187000000.0%

No prior period
Capital Expenditures

-$82.2M

Previous: -$42.2M-94.8%
Free Cash Flow

$228M

Previous: $208M+10.1%
Net Income

$311M

Previous: $250M+24.4%
Operating Income

$358M

Previous: $274M+30.6%
Gross Profit

$864M

Previous: $761M+13.5%
Cash & Equivalents

$663M

Previous: $709M-6.5%
Total Assets

$6.08B

Previous: $5.47B+11.1%
Stock-Based Comp

$23.9M

Previous: $20.8M+14.9%

Revenue & EPS history

Edwards Lifesciences · Revenue · Quarterly

$1.13B

Q1 2020+13.7%vs Q1 2019
Beat estimate in 13 of 16 quarters(81%)
ActualEstimate

Revenue by segment

Edwards Lifesciences · $946M total across 3 segments · Q1 2020

  • Transcatheter Aortic Valve Replacement
    $742M+24.2%
  • Surgical Structural Heart
    $193M-9.9%
  • Transcatheter Mitral & Tricuspid
    $10.5M+144.2%

Forward guidance

Edwards Lifesciences expects the impact of COVID-19 on sales will be most severe in the second quarter, followed by a gradual recovery in the third quarter, and a fourth quarter that better resembles its original expectations for sales. 2020 sales are expected to be $4.0 to $4.5 billion, and adjusted earnings per share are expected to be $4.75 to $5.25. For the second quarter of 2020, total sales are projected to be between $700 and $900 million.

Tailwinds

  • Company assumes the impact of COVID-19 on sales will be most severe in the second quarter
  • Company expects a gradual recovery in the third quarter
  • Company expects a fourth quarter that better resembles its original expectations for sales
  • Overall, 2020 sales guidance for Edwards is now expected to be $4.0 to $4.5 billion
  • Company now expects full year 2020 adjusted earnings per share of $4.75 to $5.25

Headwinds

  • Difficult to accurately predict the progression of COVID-19
  • Difficult to predict the extent of the disruption to hospital procedures
  • Wide range of potential outcomes for sales and earnings for 2020
  • Second quarter total sales are projected to be between $700 and $900 million
  • This is a very difficult time for structural heart patients

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

-1.3%

Avg return

Earnings day

-2.1%

Avg return

5 days after

-1.5%

Avg return

30 days after

50%

35 / 70 earnings

Positive

+11.6%

Q1 2017

Best reaction

-31.4%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-1.1%+1.9%+7.7%
Q4 2025+3.0%-1.5%+6.2%
Q3 2025-0.8%-0.8%+3.8%
Q2 2025+0.1%+4.1%-0.8%
Q1 2025+6.6%+8.3%+6.4%
Q4 2024+6.9%+7.4%-2.3%
Q3 2024-1.7%-1.8%-0.2%
Q2 2024-31.4%-26.8%-18.6%
Q1 2024-2.5%-4.4%-0.7%
Q4 2023+0.6%-1.2%+9.0%
Q3 2023-10.9%-11.5%-3.7%
Q2 2023-9.8%-10.5%-16.9%
Q1 2023-1.2%-0.3%-6.6%
Q4 2022+7.1%+8.0%+5.5%
Q3 2022-18.3%-16.3%-12.0%
Q2 2022-4.8%-3.2%-13.6%
Q1 2022-8.3%-11.7%-17.7%
Q4 2021-6.9%-0.3%+3.2%
Q3 2021-0.4%-1.2%-6.4%
Q2 2021+2.0%+4.2%+5.8%
Q1 2021+7.5%+10.0%+4.8%
Q4 2020-3.7%-5.3%-4.0%
Q3 2020-6.0%-7.5%+0.1%
Q2 2020+0.3%-0.6%+1.0%
Q1 2020+3.2%-1.6%+1.1%
Q4 2019-5.5%-2.7%-12.0%
Q3 2019+3.0%+6.8%+8.4%
Q2 2019+10.8%+9.7%+11.7%
Q1 2019-0.3%-1.2%-4.7%
Q4 2018-0.0%+0.8%+2.9%
Q3 2018-6.0%-6.1%-0.7%
Q2 2018-8.5%-8.2%-8.6%
Q1 2018-5.6%-5.8%+0.3%
Q4 2017+4.1%+0.4%+6.3%
Q3 2017-9.4%-10.7%-4.6%
Q2 2017+0.4%-0.6%-3.5%
Q1 2017+11.6%+12.0%+16.5%
Q4 2016-6.8%-6.6%-3.9%
Q3 2016-19.5%-17.8%-25.8%
Q2 2016+7.4%+7.5%+7.7%
Q1 2016+0.9%
Q4 2015+5.7%
Q3 2015+0.7%
Q2 2015+0.7%
Q1 2015-1.8%
Q4 2014+7.5%
Q3 2014+10.9%
Q2 2014+9.4%
Q1 2014+0.7%
Q4 2013+1.0%
Q3 2013-9.3%
Q2 2013+2.3%
Q1 2013-22.8%
Q4 2012-7.1%
Q3 2012-0.3%
Q2 2012+4.5%
Q4 2011-1.6%
Q1 2012+11.6%
Q3 2011-5.9%
Q2 2011-3.5%
Q4 2010+0.5%
Q1 2010+0.5%
Q1 2011-2.1%
Q4 2008-1.7%
Q1 2009-1.7%
Q3 2010+1.3%
Q3 2009+1.3%
Q2 2009+1.3%
Q2 2010+1.3%
Q4 2009+1.3%

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