Edwards Lifesciences Q4 Earnings Set to Benefit From TAVR Growth

Zacks

Merit Medical Systems

-1.28%

Edwards Lifesciences Corporation EW is expected to report fourth-quarter 2024 results shortly.

See the Zacks Earnings Calendar to stay ahead of market-making news.

In the last reported quarter, the company’s adjusted earnings per share of 67 cents were in line with the Zacks Consensus Estimate. The company’s earnings beat estimates in one of the trailing four quarters and matched estimates in the other three. EW has a trailing four-quarter earnings surprise of 0.78% on average.

Q4 Estimates

The Zacks Consensus Estimate for the company’s fourth-quarter 2024 revenues is pegged at $1.36 billion, suggesting an 11.2% decline from the year-ago reported figure.

The Zacks Consensus Estimate for fourth-quarter 2024 net earnings of 55 cents per share indicates a 14.1% drop from the year-ago reported figure.

For the fourth quarter of 2024, the company projected total sales to be between $1.33 billion and $1.39 billion. It expects adjusted EPS in the band of 53 cents to 57 cents.

Edwards Lifesciences Corporation Price and EPS Surprise

Edwards Lifesciences Corporation price-eps-surprise | Edwards Lifesciences Corporation Quote

The Zacks Consensus Estimate for earnings has been unchanged over the past 30 days.

Factors at Play

Similar to the last reported quarter, Edwards Lifesciences is likely to have gained from its patient-focused innovation strategy. A favorable hospitalization trend, strong global adoption of transcatheter heart valves and improved procedural volume are expected to have driven growth in the fourth quarter. However, the absence of Critical Care business operation through September is likely to have impacted the full fourth-quarter total revenues of Edwards Life Sciences.

On Sept. 3, 2024, the company announced the completion of the sell-off of the Critical Care product group to Becton, Dickinson and Company or BD, for a total value of $4.2 billion. This business recorded full-quarter revenues of $246 million in the second quarter of 2024, reflecting 7% year-over-year growth. The absence of this segment for an entire quarter is expected to have a significant impact on the company's fourth-quarter revenues on a year-over-year basis.

Within the Transcatheter Aortic Valve Replacement (TAVR) arm, Edwards Lifesciences is likely to have witnessed continued growth in procedures across the United States and worldwide. Continued strong demand for the company’s SAPIEN platform is expected to have acted as the primary growth factor. SAPIEN currently constitutes the majority of the company’s sales within the United States.

However, at the time of the third-quarter earnings release, the company talked about certain regional pressures hampering growth within the segment. In the third quarter, in Japan, slower market growth put pressure on results. This might have continued even in the fourth quarter.

For the fourth quarter, EW’s earlier-provided guidance assumed year-over-year TAVR growth below the full-year TAVR growth expectation of 5% to 7%. One of the reasons behind this was a tough year-over-year comparison. Further, the impact from hurricanes in the southeast, as well as a one-time impact from a China distributor rebate adjustment during the to-be-reported quarter are expected to have impacted the performance within TAVR.

The company’s Transcatheter Mitral and Tricuspid Therapies (TMTT) segment’s PASCAL platform is likely to have maintained strong growth momentum in the fourth quarter globally, backed by its portfolio of differentiated therapies, positive pivotal trial results to support approvals and adoption and favorable real-world clinical outcomes. The TMTT segment’s performance is expected to have been driven by the strong adoption of the differentiated PASCAL Precision platform across the United States and Europe. Further, the company is expected to have gained business with the continued adoption of the EVOQUE tricuspid replacement system and the strong performance of the SAPIEN M3 mitral replacement system in the United States and Europe.

Our model estimates the Transcatheter Heart Valves business to report revenues of $1.10 billion, implying a 5.9% improvement from the year-ago period.

Within Surgical Structural Heart, the company is expected to have recorded strong fourth-quarter growth, banking on the penetration of its premium products across all regions.

Edwards Lifesciences is likely to have gained from strong global adoption of its premium RESILIA technology and improvement in procedural volumes. Edwards Lifesciences is expected to have seen strong global adoption of premium surgical technologies, including the MITRIS RESILIA valve, INSPIRIS and KONECT. In the fourth quarter, the company is expected to have witnessed procedure growth globally within Surgical.

Our model estimates the segment’s fourth-quarter revenues to be $264.8 million, suggesting a 6.7% rise from the year-ago quarter’s reported figure.

However, staffing shortages, which reduced hospital capacity, and choppy market conditions due to a difficult geopolitical situation are likely to have impeded the company’s growth in the quarter to be reported.

What Our Quantitative Model Predicts

Per our proven model, stocks with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) have a good chance of beating estimates. This is not the case here, as you can see:

Earnings ESP: Edwards Lifesciences has an Earnings ESP of -0.03%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to post an earnings beat this quarter.

Masimo MASI has an Earnings ESP of +4.05% and a Zacks Rank #1. The company is set to release fourth-quarter 2024 results on Feb. 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS implies an increase of 14.4% from the year-ago quarter reported figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter earnings implies an increase of 2.5% from the year-ago quarter figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS suggests an increase of 7% from the year-ago reported figure.

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TECH Gears Up to Report Q2 Earnings: Here's What to Expect

Zacks

Merit Medical Systems

-1.28%

Bio-Techne

+1.09%

Bio-Techne Corporation TECH is set to release its second-quarter fiscal 2025 results on Feb. 5, before the opening bell.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The life science and diagnostic product maker posted adjusted earnings per share (EPS) of 42 cents in the last reported quarter, which exceeded the Zacks Consensus Estimate by 10.53%. The company topped earnings estimates in two of the trailing four quarters and missed in the other two, the average surprise being 1.55%.

Q2 Estimates for TECH

For the fiscal second quarter, the Zacks Consensus Estimate for Bio-Techne’s revenues is pegged at $285.3 million, indicating an increase of 4.7% from the year-ago reported figure.

The Zacks Consensus Estimate for the company’s second-quarter fiscal 2025 EPS suggests a 5% decline to 38 cents.

Estimates for Bio-Techne’s fiscal second-quarter earnings have remained unchanged in the past 90 days.

Bio-Techne Corp Price and EPS Surprise

Bio-Techne Corp price-eps-surprise | Bio-Techne Corp Quote

Factors Influencing Bio-Techne's Fiscal Q2 Performance

Bio-Techne’s cell and gene therapy vertical within the Protein Sciences segment has shown continued traction in recent quarters, banking on strong performances of the company’s proteomic reagent and scalable workflow solutions that enable customers to accelerate e-clinical, clinical and eventually aid in the commercialization of these next-generation therapeutics. New customer additions over the past two years have led to a significant expansion of this business. In the fiscal second quarter, the company is expected to have witnessed improved stabilization from large- pharma customers and an increase in ordering trends from biotech customers.

Further, the company’s newly added Simple Western platform called Leo (a high-throughput automated western blot system, enabling the simultaneous analysis of up to 100 samples in a single three-hour run) gained significant customer interest in the first quarter of fiscal 2025, being increasingly used for absolute protein quantitation and relative potency assay. This might have contributed to the top line in the fiscal second quarter.

A gradually easing biotech funding scenario might have increased biotech spending, contributing to the company’s business.

The consensus estimate for Protein Sciences revenues is pegged at $197.7 million for the fiscal second quarter, almost in line with the year-ago period reported figure.

Within the Diagnostics and Spatial Biology segment (previously referred to as the Diagnostics and Genomics segment), in the Spatial Biology growth vertical, despite the budget reset by pharma customers, Bio-Techne is expected to have witnessed solid growth, banking on the strong adoption of the company’s new spatial biology instrument COMET.

In the calendar year 2024, Bio-Techne enabled RNA detection and visualization on COMET with the launch of RNAscope HiPlex capabilities for the instrument. Following this launch, COMET is now capable of detecting and visualizing up to 24 plate proteins and 12 RNA targets simultaneously, creating a highly differentiated multiomic system for the rapidly growing spatial biology market. These enhanced capabilities are expected to have expanded the company’s business in the fiscal second quarter.

The launch of Bio-Techne's R&D system branded antibodies validated for use on the COMET is also expected to have aided the company.

Meanwhile, the Molecular Diagnostics growth vertical is already in growth acceleration mode as its unique and underpenetrated portfolio of products (including ExoDx prostate test and Asuragen kit business) continues to take market share. In the fiscal second quarter, too, this trend is likely to have continued, banking on the ongoing traction and market adoption of this portfolio.

The consensus estimate for Diagnostics and Spatial Biology revenues is pegged at $75.4 million for the fiscal second quarter, which implies no change from the year-ago period reported figure.

What Our Model Unveils for TECH

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here, as you can see.

Earnings ESP: Bio-Techne has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

MedTech Stocks to Consider

Here are some medical stocks worth considering, as these have the right combination of elements to post an earnings beat this time:

MASI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 17.10%. The Zacks Consensus Estimate for the company’s fourth-quarter EPS indicates an increase of 14.4% from the year-ago quarter reported figure.

Merit Medical Systems MMSI has an Earnings ESP of +3.03% and a Zacks Rank #2. The company is slated to release fourth-quarter 2024 results on Feb. 25.

MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.42%. The Zacks Consensus Estimate for Merit Medical’s fourth-quarter EPS suggests an increase of 2.5% from the year-ago quarter reported figure.

Cencora COR has an Earnings ESP of +0.71% and a Zacks Rank #2. The company is set to release first-quarter fiscal 2025 results on Feb. 2.

The company’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 2.45%. The Zacks Consensus Estimate for COR’s first-quarter EPS implies an increase of 7% from the year-ago reported figure.

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Risk Warnings and Disclaimers

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DGX Stock Dips Despite Q4 Earnings and Revenue Beat, Margins Rise

Zacks

Quest Diagnostics Inc.’s DGX fourth-quarter 2024 adjusted earnings per share (EPS) of $2.23 beat the Zacks Consensus Estimate by 1.8%. The metric also exceeded the year-ago adjusted figure by 3.7%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Certain one-time expenses, like the ones related to amortization expenses, certain restructuring and integration charges, other expenses and excess tax benefits associated with stock-based compensations, were excluded from the quarter’s adjusted figures. GAAP earnings came in at $1.95 per share, up 14.7% from last year’s comparable figure.

For 2024, the company reported an adjusted EPS of $8.93, up 2.5% from the year-ago period’s levels. The figure surpassed the Zacks Consensus Estimate by 0.3%.

DGX shares dipped nearly 1.6% in pre-market trading following the earnings report.

DGX’s Revenues in Detail

Revenues reported in the fourth quarter rose 14.6% year over year to $2.62 billion. The metric surpassed the Zacks Consensus Estimate by 1.9%.

Total revenues for 2024 were $9.87 billion, reflecting a 6.4% increase from the year-ago period. The figure beat the Zacks Consensus Estimate by 0.5%.

Diagnostic Information Servicesrevenues in the quarter were up 15.1% on a year-over-year basis to $2.56 billion. This figure also surpassed our model’s projection of $2.48 billion for the fourth quarter.

Quest Diagnostics Incorporated Price, Consensus and EPS Surprise

Quest Diagnostics Incorporated price-consensus-eps-surprise-chart | Quest Diagnostics Incorporated Quote

Volumes (measured by the number of requisitions) were up 13.9% year over year in the fourth quarter. Revenue per requisition increased 0.2% year over year.

DGX’s Margin Performance

The cost of services during the reported quarter was $1.76 billion, up 13.6% year over year. The gross profit came in at $858 million, up 16.6% year over year. The gross margin was 32.7%, reflecting a 57-basis point (bps) expansion from the year-ago figure.

SG&A expenses were $466 million in the quarter under review, up 14.5% from the fourth quarter of 2023. The adjusted operating margin of 14.9% represented a 58-bps expansion year over year.

DGX’s Liquidity and Financial Health

Quest Diagnostics exited the fourth quarter of 2024 with cash and cash equivalents of $549 million compared with $686 million at the end of 2023. The cumulative net cash provided by operating activities at the end of the fourth quarter of 2024 was $1.33 billion compared with $1.27 billion at the 2023-end.

The company has a five-year annualized dividendgrowth rate of 7.59%.

A Peek Into DGX’s 2025 Guidance

Quest Diagnostics issued its outlook for 2025, underscoring confidence in the core business strength, continuing robust utilization and the momentum from acquisitions completed in 2024.

Revenues for the full year are expected in the $10.70 billion-$10.85 billion band, indicating a year-over-year increase of 8.4%-9.9%. The Zacks Consensus Estimate is pegged at $10.67 billion.

Adjusted EPS is expected in the range of $9.55-$9.80. The Zacks Consensus Estimate for the metric is pegged at $9.71.

Our View on DGX

Quest Diagnostics reported better-than-expected earnings and revenues in the fourth quarter of 2024, which also increased from the comparable 2023 figures. The company marked several achievements this year, including growing its Advanced Diagnostics portfolio and deploying automation and AI technologies across diverse laboratories, customer service and administrative areas. Impressively, Quest Diagnostics completed eight acquisitions, including LifeLabs in Canada and four hospital outreach lab acquisitions.

The company benefitted from expanding the consumer-initiated testing offerings on the questhealth.com platform. The expansion of both margins in the quarter is highly encouraging.

DGX’s Zacks Rank & Other Key Picks

Quest Diagnostics currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the broader medical space are Masimo MASI, Insulet PODD and Haemonetics HAE.

Masimo reported third-quarter 2024 adjusted earnings of 98 cents per share, which topped the Zacks Consensus Estimate by 16.7%. Revenues of $504.6 million beat the Zacks Consensus Estimate by 0.4%. MASI sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MASI’s earnings yield of 2.6% remains well ahead of the industry’s -3.3% yield. The company surpassed earnings estimates in each of the trailing four quarters, the average surprise being 17.1%.

Insulet, carrying a Zacks Rank #2, posted third-quarter 2024 adjusted earnings of 90 cents per share, topping the Zacks Consensus Estimate by 16.9%. Revenues of $543.9 million exceeded the Zacks Consensus Estimate by 4.9%.

PODD has an estimated 2024 earnings growth rate of 17.1% compared with the industry’s 13.4%. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 52.4%.

Haemonetics, carrying a Zacks Rank #2, reported a second-quarter fiscal 2025 adjusted EPS of $1.12, which surpassed the Zacks Consensus Estimate by 2.8%. Revenues of $345.5 million topped the Zacks Consensus Estimate by 0.7%.

HAE has an earnings yield of 6.7% compared with the industry’s 0.4% growth. The company’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 2.8%.

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Risk Warnings and Disclaimers

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