IRVINE, Calif. -- Edwards Lifesciences Corp. lowered its annual net income guidance on Friday, as it announced third-quarter results, citing disappointing sales of its Sapien heart valve.
However the company also received broader marketing approval for the device, as the Food and Drug Administration said Edwards can market Sapien for patients who face major risks from open-heart surgery in addition to patients who are too sick to have that procedure done.
Earlier in October Edwards forecast weak third-quarter results, saying Sapien sales were being hurt by government austerity measures in Europe, Medicare coverage concerns in the U.S., and staffing problems like summer vacations. The company said total sales growth and Sapien revenue would both fall short of its previous estimates.
The company now expects to report net income of $2.54 to $2.58 per share in 2012, down from its previous estimate of $2.60 to $2.68 per share. Edwards had forecast $1.9 billion to $1.97 billion in annual revenue and now expects to reach the bottom end of that range.
Analysts were expecting net income of $2.57 per share and $1.91 billion in revenue, according to FactSet.
On Friday Edwards said its income in the third quarter rose 35 percent, to $69.2 million, or 58 cents per share, from $51.6 million, or 43 cents per share. Analysts forecast 56 cents per share on average.
Revenue rose 9 percent to $447.9 million from $412.7 million, as the company disclosed on Oct. 8. Edwards said heart valve revenue grew 50 percent to $123.8 million, and critical care product revenue slipped 1 percent to $138.4 million.
Edwards previously forecast $465 million to $485 million in revenue and analysts expected $476.5 million.
The Sapien valve is designed to replace diseased aortic valves. It is threaded to the heart through arteries in the leg or ribs. The FDA approved the Sapien valve in November for use in patients who were too sick to have open-heart surgery. On Friday the FDA broadened the device's marketing approval to include patients who face high risks from open-heart surgery but are not too sick to endure the procedure.
Medicare agreed to cover Sapien surgical procedures in May.
Edwards now expects $530 million to $560 million in Sapien sales in 2012, down from its previous estimate of $550 million to $600 million.
In the fourth quarter Edwards expects to earn between 76 and 80 cents per share on $490 million to $520 million in revenue. Analysts estimate 78 cents per share and $505.7 million in revenue.
Edwards shares fell 60 cents to close at $86.14 as the broader markets slumped.