Abiomed Beats 2Q Ests, Profit Jumps - Analyst Blog
November 02 2012 - 12:10PM
Zacks
Leading cardiac assist devices
maker, Abiomed Inc. (ABMD), reported second
quarter fiscal 2013 adjusted earnings per share of 13 cents,
beating the Zacks Consensus Estimate of 5 cents and surpassing the
year-ago adjusted earnings of 3 cents. Adjusted earnings exclude
one-time items other than stock-based compensation charges.
On a reported basis, the Massachusetts-based company registered a
profit of $5.5 million (or 13 cents per share), almost nine fold
higher than the year-ago quarter. Robust sales of its popular
Impella cardiac pumps led to growth in profits.
However, the company revealed that the U.S. Attorney’s Office for
the District of Columbia is investigating the marketing and
labeling of the company’s key product, the Impella 2.5. Following
the announcement of this news, Abiomed’s share prices plunged more
than 30% to $13.61 on November 1.
Revenue
Revenues jumped 27% year over year to $37.4 million, marginally
beating the Zacks Consensus Estimate of $37 million. Growth was led
by solid sales of Impella heart pumps.
Globally, Impella sales soared 32% year over year to $32.8 million
in the second quarter. U.S. Impella sales grew 33% to $30.8
million. Abiomed opened 30 new U.S. Impella 2.5 sites in the
quarter to end with a total of 695 customer sites.
Margins
Gross margins inched down to 80.8% from 81.2% a year ago. Operating
margin was 15.9% compared to 2.6%
Selling, general and administrative expenses were lower at 49.3% of
sales versus 55.4% in the year-ago quarter. Research and
Development expenses, as a percentage of sales, fell to 15.6% from
21.9%.
Balance Sheet
Abiomed exited the quarter with cash and cash equivalents and
short-term marketable securities of $89 million, 46.4% higher than
the previous year. The company had no debt.
Guidance
The company reiterated its revenue guidance for fiscal 2013.
Abiomed forecasts revenues to grow 23%-24% to $155 million and $157
million. Global Impella sales are expected to increase more than
30%.
Recent Developments
In September, Abiomed received U.S. Food and Drug Administration
(FDA) approval for its new Impella product dubbed Impella CP
(Cardiac Power). It is known as the Impella cVAD outside the U.S.
The percutaneous heart pump can successfully pump roughly 4 liters
of blood in one minute. The device is now available in limited
numbers in top heart hospitals in the U.S.
In addition, the American Medical Association approved three new
Category I Current Procedural Terminology (CPT) codes for the
Impella procedures, to be effective from January 1, 2013.
The company also published the PROTECT II study in
Circulation, a journal of the American Heart
Association.
Further, the company presented an update on the Symphony clinical
trial at the Transcatheter Cardiovascular Therapeutics (“TCT”)
conference in October 2012. The Symphony synchronized heart pump is
currently undergoing clinical trials in France and Canada and is
not yet clinically approved for sale in the U.S.
Our Take
Abiomed is enjoying strong demand for its Impella products. Impella
utilization continues to grow at a healthy pace, as is evident from
the increasing number of patients being treated with the device.
The company is hopeful that the FDA 515 Program Initiative,
concerning the Impella products will be held soon in the near-term
by the regulatory body.
However, we are wary of negative sentiments amongst investors
regarding the Impella 2.5 investigation process. Its competitors
such as Thoratec Corporation (THOR) might take
advantage of the situation and gain market share. Our ‘Neutral’
recommendation on the stock carries a short-term Zacks #4 Rank
(Sell) rating.
ABIOMED INC (ABMD): Free Stock Analysis Report
THORATEC CORP (THOR): Free Stock Analysis Report
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