ev3 Outperforms – Analyst Blog

ev3, Inc. (EVVV) reported first quarter fiscal 2010 earnings per share of 20 cents, handily outperforming the Zacks Consensus Estimate of 6 cents and earnings of 7 cents in the year-ago quarter.

Total revenue in the first quarter increased 23% year over year to $123.9 million. On a constant-currency basis, net sales increased 21% year over year.

Peripheral vascular sales increased 13% year over year to $74.8 million. Growth was led by higher demand for the company’s plaque excision, stents, thrombectomy and embolic protection, and procedural support products.

Neurovascular sales increased 44% year over year to $49.1 million buoyed by higher sales of embolic products and stents; and neuro access and delivery products.

Geographically, the U.S. contributed roughly 59% to the total revenue, which increased 18% year over year. International revenues increased 31% year over year.

ev3 reported a gross margin expansion of 730 basis points (bps) year over year to 76.4%. Sales, general and administrative expenses as a percentage of sales declined 550 bps year over year to 49.9%. Research and development expenses as a percentage of sales declined 30 bps year over year to 11.2%. Operating margin increased 11.5% year over year to 7.9%.

ev3 ended the first quarter with cash and cash equivalents of $116.8 million, a sequential increase of 19.1%. The company had an outstanding long-term debt of $5.8 million at the end of the first quarter.

ev3 has raised its sales and earnings per share guidance for fiscal 2010. For the year, the company expects total revenues in the range of $520 to $530 million, compared to the previous guidance of $500 to $515 million. Adjusted earnings per share should be in the range of 87 to 92 cents, versus the prior guidance of 78 to 84 cents. The number of outstanding shares should be roughly 115.4 million.

For the second quarter, ev3 expects total revenues in the range of $129 to $133 million. Adjusted earnings per share are expected between 18 and 21 cents. The number of outstanding shares should be roughly 115.1 million.

ev3 is a Plymouth, MN-based endovascular company that concentrates on catheter-based or endovascular technologies for the minimally invasive treatment of vascular diseases and disorders. The company’s acquired broad product portfolio focuses on applications in each of the three sub-markets of the endovascular device market (ev3) − peripheral vascular, cardiovascular and neurovascular.
 ev3 competes in the endovascular market with a number of large companies like Boston Scientific Corp. (BSX), Medtronic Inc. (MDT), C.R. Bard (BCR), Cordis etc.
 


Presently, we have a ‘Neutral’ recommendation for ev3.