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Abiomed (ABMD) Beats Earnings & Revenue Estimates in Q3

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Danvers, MA-based Abiomed Inc.ABMD , a leading developer, manufacturer and marketer of medical products, reported third-quarter fiscal 2017 earnings of 34 cents per share, which surpassed the Zacks Consensus Estimate by 5 cents and surged 47.8% from the year-ago quarter.

Notably, Abiomed's streak of positive earnings surprises is noteworthy, which accounts for an average beat of 16.4% over the last four quarters. Meanwhile, the company has a Zacks Rank #3 (Hold).

Revenues increased 33.7% year over year to almost $114.7 million, outpacing the Zacks Consensus Estimate of $111 million. The year-over-year upside was supported by the robust performance of the Impella heart pump product line.

Abiomed Inc. - Earnings Surprise | FindTheBest

Stock Performance

Over the last three months, the stock added 3.6%, comparing favorably with the Zacks classified Medical Instruments sub-industry's return of 0.9%.

Additionally, a stellar one-year return of 27.3% compared to S&P 500's 17.3% is a significant positive in our view.

Quarter Highlights

Of the major highlights in the quarter, Abiomed launched the Impella Quality (IQ) Assurance Program, which is exclusively built for protected percutaneous coronary interventions (PCI) and cardiogenic shock patients.

Secondly, Abiomed announced the expanded U.S. FDA pre-market approval (PMA) for the usage of Impella CP heart pump. The heart pump is used for high-risk PCI in patients with severe coronary artery disease and depressed left ventricular ejection fraction (read more: ABIOMED Impella CP Gets Expanded FDA Approval, Stock Up ).

Quarter in Details

Globally, Impella revenues grew a strong 35% to $109.2 million in the quarter.

U.S. Impella revenues improved 34% to $100.3 million while outside the U.S., revenues shot up 47% at cc to $8.6 million. Germany accounted for the majority of the international revenues which grew 80% on a year-over-year basis.

During the reported quarter, the installed base for Impella 2.5 heart pumps in the U.S. grew by 20 hospitals, taking the installed customer base total to 1,199 sites. The installed customer base for Impella CP heart pumps grew by 49 new U.S. hospitals, taking the total to 972.

ABIOMED, Inc. Price and EPS Surprise

ABIOMED, Inc. Price and EPS Surprise | ABIOMED, Inc. Quote

Overall operating income for the reported quarter came in at $25.4 million or 22.2% of operating margin, compared with $17.5 million or 20.4% operating margin in the prior-year quarter.

Financial Condition

Cash and cash equivalents were $22 million at third-quarter end, totaling $258.9 million as of Dec 31, 2016. Notably, management announced that the company currently has no debt.

Guidance

Abiomed forecasts fiscal 2017 revenues in the range of $440 million to $445 million compared to the previously issued guidance of $435 million to $445 million. This marks an increase of 34-35% from the fiscal 2016 level. Operating margin is projected in the band of 18% to 20%.

Our Take

Despite a solid performance in the reported quarter, intensifying competition in the niche markets is likely to mar the company's prospects over the long haul. Although Abiomed's significant international presence helps broaden its customer base, fluctuations in currency exchange rates may impact the company's international sales.

Nevertheless, the flagship Impella product line is a significant growth catalyst for the company.

Furthermore a long-term expected earnings growth rate of 26.67% instills our confidence on the stock.

Stocks to Consider

Better-ranked stocks in the broader medical sector include Addus Glaukos Corporation GKOS , Dextera Surgical Inc. DXTR and Hologic, Inc. HOLX . Notably, Addus Glaukos and Hologic sport a Zacks Rank #1 (Strong Buy) while Dextera has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 137.8%.

Dextera Surgical has a long-term expected earnings growth rate of 25%. Additionally, the company posted a promising one-month return of almost 60.2%.

Hologic has a long-term expected earnings growth rate of roughly 10.34%. Notably, the stock represents a solid one-year return of 19.6%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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