On May 15, we have updated our research report on
). We believe the company enjoys a strong demand for its flagship
Impella products. However, increasing pressure on margins due to
higher costs and expenses is a matter of concern for us.
ABIOMED posted earnings per share of 9 cents for the fourth quarter
of its fiscal 2014, which was flat compared with the year-ago
earnings as well as the Zacks Consensus Estimate. However, net
earnings fell 3.2% to $3.6 million from $3.7 million in the fiscal
For the full fiscal year, earnings per share halved to 18 cents
from 37 cents in the prior year quarter. Net earnings also halved
to $7.4 million from $15.0 million in fiscal 2013.
The decline in earnings for both the quarter and the year is
attributable to higher costs and expenses that more than offset the
impact of increased revenues for both the periods.
Revenues in the quarter rose 15.5% to $50.4 million, marginally
lagging the Zacks Consensus Estimate of $51 million. Revenues for
the year upped 16.1% to $183.6 million.
Globally, Impella revenues grew 17% to $46.1 million in the
quarter. For the full fiscal year, worldwide Impella revenues
escalated 19% to $167.0 million.
Costs and expenses in the quarter rose 18.2% to $46.8 million in
the quarter. For the full fiscal year, costs and expenses grew
23.8% to $175.3 million. As a result, gross margin fell 30 bps to
79.7% in the year compared to 80.0% in the prior year.
Operating margin in the quarter dropped 220 bps to 7.3% from 9.5%
in the fourth quarter of fiscal 2013. For the full fiscal year,
operating margin slashed 590 bps to 4.6% from 10.5% in the year-ago
ABIOMED expects revenues to grow 11.4 to 15.2% year-over-year to
$205-$212 million for fiscal 2015. The Zacks Consensus Estimate of
$209 million lies within the guided range. Operating margin is
expected in the range of 5 to 7% for the year, which is higher than
the fiscal 2014 level.
Currently, ABIOMED retains a Zacks Rank #4 (Sell). Some
better-ranked medical instrument companies that are worth
considering at the moment include
Natus Medical Inc.
). All of them carry a Zacks Rank #2 (Buy).
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