The Danvers, Mass.-based heart pump maker posted profits of $7.7 million, or 17¢ per share, on sales of $76.4 million, for profit growth of 101.5% compared with the same period last year.
The consensus outlook on Wall Street was for earnings of 16¢ on sales of $74.6 million. Abiomed raised its outlook for the rest of fiscal 2016, saying it now expects operating margins of 15% to 17%, up from prior guidance for 14% to 16%. Full-year sales are expected to be between $305 million and $315 million, up from $300 million to $310 million.
Bafflingly, ABMD shares closed down 28.6% at $70.40 apiece today.
“We have had an exciting start to fiscal year 2016, with 1st-half revenue growth of 49% and establishment of Protected PCI as a new indication. As evidenced by our patient growth and awareness at TCT, Protected PCI has been validated by physicians that treat higher risk patients requiring percutaneous hemodynamic support in the cath lab,” chairman, president & CEO Michael Minogue said in prepared remarks. “We are confident that in the years ahead, Abiomed will deliver strong growth, support new indications and countries, and launch new best in class products. As always, Abiomed is committed to meaningfully impacting the lives of our patients and helping our physicians improve outcomes.”
Leerink Partners analyst Danielle Antalffy speculated that the sell-off was driven by concerns that Abiomed won’t be able to deliver on its growth projections.
Investors fear that Abiomed’s “implied mid-20% sales growth guidance in the back half of the year suggests that its $1.2B ‘base-case’ FY2020 sales vision is unattainable,” Antalffy wrote in a note to investors. “To us, this fear is unwarranted, as we view slowing growth in the back half of the year as: (1) Likely conservative; and (2) Largely driven by increasingly difficult y/y comps. ABMD needs to drive a ~34% sales growth CAGR over the FY2016-20 timeframe to achieve its $1.2B vision. And with a) continued strong adoption momentum, and b) potential incremental step-ups in growth from indication and geographic expansions – notably cardiogenic shock and Japan – likely in mid-CY2016, we believe ABMD is well-positioned to achieve if not exceed this level of growth.”