Boston Scientific Corp.'s CEO declared Tuesday that the company is riding its best wave in five years as it not only shows progress in its core cardiac rhythm business, but also robust gains in medical and surgical technologies.
Such improvements led to a strong quarter for the Natick, Mass.-based med-tech giant, as it reported sales and profits that exceeded expectations. "It's the first time we've had a return to growth for a full year in five years," said CEO Mike Mahoney. "Five of our seven businesses grew faster than the market."
Showing especially strong results was the company's MedSurg division, which saw revenue grow 12 percent on a constant-currency basis over the same quarter a year ago. Leading the charge within that business was neuromodulation, which saw sales surge 33 percent. It was the division's second straight quarter of growth exceeding 30 percent.
Officials said the performance of the company's cardiac rhythm management business continued to improve, growing 3 percent over the previous year. Emerging markets saw revenue grow 18 percent, with that segment now comprising about 9 percent of the company's sales. That is expected to rise to 15 percent by 2017, Mahoney told analysts Tuesday.
Sales of drug-coated stents, used to keep open coronary arteries, were down 13 percent and were below analysts' expectations.
Still, Mahoney said he was pleased with the overall results. "This marks our third consecutive quarter of accelerated operational revenue growth, and we look forward to continued improvement of our annual sales and earnings performance in 2014," he said in a statement Tuesday.
The company, which has about 5,000 employees in Minnesota, reported revenue of $1.84 billion for the fourth quarter of 2013, a 1 percent increase over the fourth quarter of 2012 and up 5 percent before the impact of differences in foreign currency values. Fourth-quarter profit rose to $108 million — 8 cents a share — from $60 million — 4 cents a share — a year earlier.
Joanne Wuensch of BMO Capital Markets, in a note to investors, said the trend at Boston Scientific has been encouraging. "There is no argument to the revenue acceleration story that is happening. ... There are a number of new products that are in just the early stages of launch."
One of those products is the subcutaneous implantable cardioverter defibrillator, or S-ICD, a device that can restart the heart without having to snake wires into the heart. Mahoney told analysts Tuesday that supply issues have been worked out and that Boston Scientific is poised to gain defibrillator market share in 2014 with the S-ICD.
Another device, expected to soon win approval from the Food and Drug Administration, is the Watchman — a small mesh plug that closes an opening in the heart to help prevent strokes in patients with atrial fibrillation.
Joshua Jennings of Cowen and Co. wrote to investors that he expects Boston Scientific's 2013 "momentum to carry over into 2014."