Stryker Corporation (SYK), Johnson & Johnson (JNJ): Earnings Pain Intensifies in the Medical-Device Industry

If that wasn’t bad enough, Edwards Lifesciences Corp (NYSE:EW)’s outlook for the rest of 2013 doomed this stock on Wednesday: Shares plunged nearly 22% during the day and another 14% after hours. The company lowered its earnings projections for the full year to between $3 and $3.10, after earlier expectations had called for $3.27.

The most damning note came from the company’s Sapien heart valve, however. While sales of the valve, which is used to replace damaged heart valves in surgery, climbed 40% this quarter, Edwards lowered its projected sales range of the Sapien by $40 million for the full year. Revenue from the company’s other businesses, such as critical-care products and surgical heart valve therapy products, also fell this quarter, and disappointing guidance for the Sapien casts doubts on this company’s performance over the rest of the year.

Edwards’ stock’s massive plunge today was probably too much for the miss, but the cardiovascular market overall has been tough on medical-device companies recently. St. Jude Medical, Inc. (NYSE:STJ) reported falling sales in its most recent quarterly report, primarily because of cardiovascular-related revenue on the decline, and Medtronic, Inc. (NYSE:MDT), a competitor of Edwards’ in the heart valve market with its CoreValve device, could still threaten the Sapien’s sales despite a court ruling recently that judged the CoreValve to have infringed on one of Edwards’ patents.

Did all that justify a drop of more than 36% in just one day? Probably not, but Edwards’ future is shaky at best. Stryker’s in a better position after earnings — indeed, its place atop the orthopedics market, an industry that should capitalize on demographic trends in the future, makes this one of the top medical-device stocks to keep an eye on. One thing has been clear throughout earnings season so far, however: The medical-device industry’s problems aren’t going away anytime soon.

The article Earnings Pain Intensifies in the Medical-Device Industry originally appeared on Fool.com.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson and owns shares of Johnson & Johnson and Medtronic.

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