Even without the $750 million settlement recorded during the quarter, Edwards reported an 8.7% increase in per-share earnings on an 11.2% increase in sales for the 3 months ended June 30. Including special charges and credits, Edwards’ profits jumped 528% year-over-year.
Edwards increased its performance projection for the year, now expecting sales at the high end of its previous $2.05-$2.25 billion range and per-share earnings of $3.24-$3.34, previously set at $3.10. The Irvine, Calif.-based company got an immediate boost in after-market trading following the earnings release, with EW shares up 6.6% as of about 4:40 p.m., ahead of the quarterly earnings call.
In total the device maker reported profits of $547 million, or $5.08 per diluted share, on sales of $575.1 million during the quarter. That compared with profits of $93.3 million, or 81¢ per share, on sales of $517.2 million during the same period last year.
Excluding special items, adjusted per-share earnings came to 88¢, beating analysts’ consensus estimate by 10¢.
Edwards saws major movement in its valve business in Q2, most notably with the long-awaited resolution to the patent war with Medtronic (NYSE:MDT) over transcatheter aortic valve technologies. In addition to the $750 million settlement, Medtronic agreed to pay royalties through April 2022 of at least $40 million annually to put to rest all pending litigation between the companies without either admitting any infringement. The settlement is estimated to be worth $1 billion in total. Edwards recorded litigation expenses of $2.6 million for its most recent quarter.
Edwards also announced mid-June that it won FDA approval for its next-generation Sapien XT TAVI system, indicated for treating high-risk and inoperable patients. In May the company released positive early clinical trial results for the Sapien 3 valve, which has been on the market in Europe since January.
"In Europe, adoption of transcatheter valve therapy continues to be quite strong and we believe we gained share with SAPIEN 3," chairman & CEO Michael Mussallem said in prepared remarks. "Representing more than half of our European [transcatheter heart valves] sales, SAPIEN 3 is being very well received by clinicians who appreciate its best-in-class low profile and paravalvular leak solution."
"As we reflect on our 1st half results, we are very pleased with the performance we have achieved across all of our product lines and believe our future remains bright," he added. "Overall, we are confident in our outlook for continued strong organic sales growth, reflecting our focused innovation strategy, and our commitment to helping patients."