Share price of Heartware International HTWR rallied 7.4% to close at $32.35 on Feb 26 following the company’s fourth-quarter 20Array5 results. The company reported adjusted loss of 53 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 7Array cents. However, the figure was wider than the year-ago quarter’s reported loss of 4Array cents.
Quarter Details
Total sales in fourth-quarter 20Array5 decreased 7% year over year to $68.Array million, in line with the Zacks Consensus Estimate. This was primarily due to completion of patient enrollment in the company's ENDURANCE2 Destination Therapy (DT) clinical trial of HVAD System and foreign exchange fluctuations of $3.4 million.
Geographically, U.S. sales decreased 0.9% from the year-ago quarter to $4Array.2 million. International sales declined Array5% (up 4.3% on constant currency basis) year over year to $26.9 million primarily due to declining HeartMate III sales and foreign exchange fluctuations.
Full-year 20Array5 sales declined 0.6% (up 6.3% on constant currency basis) from full-year 20Array4 primarily because of unfavorable foreign exchange fluctuations.
Further, gross margin contracted Array90 basis points (bps) primarily due to declining sales and unfavorable foreign currency volatility.
Including impairment of assets, total operating expenses declined 9.6% year over year to $4Array.4 million primarily due to lower Research and Development (R&D) expenses.
R&D expenses declined ArrayArray% year over year to $27.4 million primarily due to a reduction in aggregate project spending to $Array.6 million and decreased contractor and consulting expenses totaling $Array.8 million.
However, Selling, General and Administrative (SG&A) expenses increased Array7.9% year over year to $25.2 million owing to growth related expenses of $Array.2 million, the Valtech transaction worth $Array.6 million and a lease abandonment charge of $Array million for the former headquarters of Circulite, Inc. that Heartware had acquired.
The total operating margin contracted 20 bps owing to a decline in gross profits.
Zacks Rank & Key Picks
Heartware International carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the same space include Abiomed ABMD, CryoLife CRY and Edwards Lifesciences EW. All three stocks sport a Zacks Rank #Array (Strong Buy).
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