What's In Store For Edwards Lifesciences' (EW) Q3 Earnings?

Edwards Lifesciences Corporation (NYSE:EW) is slated to report third-quarter 2019 results on Oct 23, after market close. The company delivered positive earnings surprises in the trailing four quarters, the average beat being 4.3%.

Let's see how things are shaping up prior to this announcement.

Which Way Are Estimates Treading?

For the third quarter, the Zacks Consensus Estimate for earnings per share stands at $1.22, suggesting a year-over-year rise of 14.02%. The same for revenues is pinned at $1.04 billion, indicating year-over-year growth of 14.4%.

Key Catalysts

Critical Care

The third-quarter results are expected to reflect strength in core the Critical Care product group. The segment has been showing solid growth in all product categories over the past few quarters.

In fact, the Zacks Consensus Estimate for the segment’s third-quarter revenues is pegged at $179 million, calling for year-over-year growth of 9.14%.

Management is optimistic about robust customer adoption of the HemoSphere all-in-one monitoring platform, particularly in the United States and Europe. As the company had stated earlier, demand for the platform is expected to drive the Critical Care group throughout 2019. The full-market launch of the platform with the FloTrac System and Acumen Hypotension Predictive Index earlier this year is likely to show on the company’s third-quarter results.

We are also upbeat about the company’s recently-completed acquisition of CASMED, a non-invasive cerebral oximetry monitoring technology company. The integration of this technology into Edwards Lifesciences’ leading hemodynamic monitoring platform is expected to strengthen the company’s position in the smart monitoring technology market. This in turn has likely contributed to the company's top line during the third quarter.

For 2019, the company expects underlying sales growth in Critical Care of 8% to 10% on momentum from the recent HemoSphere launch. We assume this segment has started driving growth for the company from the third quarter.

Surgical Structural Heart

Within the Surgical Structural Heart Group, the company is gaining on solid aortic unit volume and continued adoption of its latest premium aortic valves. Strong rollout and steady adoption of the INSPIRIS RESILIA aortic valve across the globe are expected to have strongly contributed to the third-quarter top line.

Edwards Lifesciences expects 2019 underlying sales growth within this segment at the range of 1% to 3%. We assume this segment has started driving growth for the company from the third quarter.

The Zacks Consensus Estimate for the segment’s third-quarter revenues is pegged at $195 million, suggesting a year-over-year growth of 5.4%.

Other Factors at Play

Within the Transcatheter Aortic Valve Replacement (TAVR) arm, the recent market launches of the SAPIEN 3 Ultra in Europe are expected to have contributed to third-quarter revenues. Mid-teens growth in the total number of TAVR procedures outside the United States is likely to have driven growth as well.

The latest European regulatory approval and continued rollout of PASCAL transcatheter valve repair system, a crucial addition to the Transcather Mitral and Tricuspid Therapies portfolio, is likely to reflect in third-quarter results.

The company’s international sales for the third quarter are expected to show growth on continued adoption of TAVR procedures in Japan, driven by SAPIEN 3.

The Zacks Consensus Estimate for third-quarter international net sales is pinned at $437 million, suggesting a rise of 12.6% year over year.

What Our Model Suggests

Our proven model predicts an earnings beat for Edwards Lifesciences this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Edwards Lifesciences has a Zacks Rank #3 and an Earnings ESP of +0.35%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering from the same space with the right mix of elements to surpass expectations this earnings season.

Akcea Therapeutics (NASDAQ:AKCA) has an Earnings ESP of +18.18% and a Zacks Rank of 2.

Vertex Pharmaceuticals (NASDAQ:VRTX) has an Earnings ESP of +1.97% and a Zacks Rank #1.

DENTSPLY SIRONA (NASDAQ:XRAY) has an Earnings ESP of +5.50% and a Zacks Rank of 3.

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