Have you evaluated the performance of Edwards Lifesciences' (EW Quick QuoteEW - Free Report) international operations during the quarter that concluded in September 2024? Considering the extensive worldwide presence of this medical device maker, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

Upon examining EW's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.

The company's total revenue for the quarter stood at $1.35 billion, declining 8.5% year over year. Now, let's delve into EW's international revenue breakdown to gain insights into the significance of its operations beyond home turf.

A Closer Look at EW's Revenue Streams Abroad

During the quarter, Japan contributed $81.4 million in revenue, making up 6.0% of the total revenue. When compared to the consensus estimate of $117.5 million, this meant a surprise of -30.72%. Looking back, Japan contributed $87.4 million, or 5.4%, in the previous quarter, and $108.4 million, or 7.3%, in the same quarter of the previous year.

Europe generated $319.8 million in revenues for the company in the last quarter, constituting 23.6% of the total. This represented a surprise of -11.06% compared to the $359.56 million projected by Wall Street analysts. Comparatively, in the previous quarter, Europe accounted for $335.6 million (20.6%), and in the year-ago quarter, it contributed $322.3 million (21.8%) to the total revenue.

Of the total revenue, $148.6 million came from Rest of World during the last fiscal quarter, accounting for 11.0%. This represented a surprise of -8.62% as analysts had expected the region to contribute $162.63 million to the total revenue. In comparison, the region contributed $146.1 million, or 9%, and $180.3 million, or 12.2%, to total revenue in the previous and year-ago quarters, respectively.

Revenue Forecasts for the International Markets

For the current fiscal quarter, it is anticipated by Wall Street analysts that Edwards Lifesciences will report a total revenue of $1.4 billion, which reflects a decline of 9% from the same quarter in the previous year. The revenue contributions are expected to be 8.3% from Japan ($115.89 million), 26.8% from Europe ($373.78 million) and 15.5% from Rest of World ($215.88 million).

For the full year, the company is projected to achieve a total revenue of $6.25 billion, which signifies a rise of 4% from the last year. The share of this revenue from various regions is expected to be: Japan at 7.4% ($463.04 million), Europe at 23.6% ($1.47 billion) and Rest of World at 11.9% ($744.51 million).

Concluding Remarks

Edwards Lifesciences' reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

Edwards Lifesciences currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Edwards Lifesciences' Recent Stock Market Performance

The stock has increased by 4.2% over the past month compared to the 2% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Medical sector, which includes Edwards Lifesciences, has decreased 4.1% during this time frame. Over the past three months, the company's shares have experienced a gain of 14.1% relative to the S&P 500's 7.9% increase. Throughout this period, the sector overall has witnessed a 1.7% decrease.