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Edwards Lifesciences Q4'17 EPS rises 25%; sales expected to climb in '18

Edwards Lifesciences Corp. reported a rise of 25% in adjusted EPS for the fourth quarter of 2017 and projected an increase in sales for the full year 2018.

Adjusted net income for the quarter was $203.1 million, or 94 cents per share, up from $163.6 million, or 75 cents per share, in the year-ago period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 91 cents.

GAAP net income for the quarter was $35.7 million, or 17 cents per share, down from $158.5 million, or 73 cents per share, in the fourth quarter of 2016.

The fourth-quarter EPS declined 77.5%, driven by special charges related to U.S. tax reform.

Net sales for the quarter were $888.5 million, a 15.7% increase from $767.7 million in the year-ago quarter.

Transcatheter heart valve therapy sales jumped 20.2% to $519.3 million from $432.0 million in the fourth quarter of 2016, driven by continued therapy adoption.

Research and development investments for the fourth quarter increased 27.6% to $146.6 million, or 16.5% of sales.

Full-year results

Adjusted net income for 2017 was $819.7 million, or $3.80 per share, up from $631.1 million, or $2.90 per share, in the year-ago period. GAAP net income was $622.1 million, or $2.88 per share, up from $569.5 million, or $2.61 per share, in 2016.

The S&P Capital IQ consensus normalized EPS estimate for 2017 was $3.76.

Investments increased 25% to $552.6 million, or 16.1% of sales. This increase was primarily the result of continued investments in transcatheter structural heart programs, including spending on clinical trials.

The passage of U.S. tax reform in December 2017 resulted in a net $223.5 million tax expense related primarily to the deemed repatriation of unremitted foreign earnings.

Outlook

For the full year 2018, Edwards increased its sales estimate to be at the higher end of its $3.5 billion and $3.9 billion guidance. It expects adjusted EPS to be between $4.43 and $4.63, which also benefits from a lower projected tax rate.

The S&P Capital IQ consensus normalized EPS estimate for 2018 is $4.27.

For the first quarter 2018, at current foreign exchange rates, the company projects total sales to be between $900 million and $950 million, and adjusted EPS of $1.04 to $1.14. The S&P Capital IQ consensus normalized EPS estimate for the first quarter is $1.04.