Boston Scientific Corp. CEO Hank Kucheman said Thursday that while his company's heart rhythm sales still lag, the market in the key product category appears to be stabilizing.
He would not say the market has turned around -- yet.
"I am very optimistic and excited about the future growth prospects," he said, noting that the last two quarters are "encouraging."
The Natick, Mass.-based medical device manufacturer, which employs thousands in Minnesota, on Thursday reported first quarter earnings that beat expectations and, according to one analyst, signal a positive trend for the heart rhythm industry.
Boston Scientific reported first quarter net income of $113 million, or 8 cents a share, and adjusted earnings excluding certain items of $220 million, or 15 cents a share. Revenue dropped 3 percent to $1.866 billion.
Combined with a better-than-expected earnings reported Wednesday by St. Jude Medical, Boston Scientific's numbers had analyst Larry Biegelsen of Wells Fargo predicting continued improvement for heart rhythm devices such as implantable defibrillators and pacemakers -- a $10 billion worldwide market.
"In general, we view this trend as positive for the three major [cardiac rhythm management] players (Boston Scientific, St. Jude and Medtronic)," Biegelsen said in a report to investors.
Interventional cardiology and heart rhythm sales fell 5 percent and 10 percent, respectively, versus the first quarter of 2011. Boston Scientific officials said they have an uptick in sales of their leads, wires that connect defibrillators to the heart, following the December 2011 recall of St. Jude's Riata lead.
Kucheman pointed to other highlights, including an 8 percent increase in worldwide peripheral interventions and an 8 percent increase in neuromodulation sales. Endoscopy sales also rose 5 percent.
Those gains, coupled with improvement in heart rhythm devices and a new pipeline of products just approved -- or nearing approval -- in the United States, Europe and emerging markets, had company officials optimistic Thursday.
"I am pleased with the achievements we made in the first quarter, which demonstrate continued progress towards improving our future growth profile and in executing our strategic plan," Kucheman said.
Boston Scientific estimates sales for the second quarter of 2012 in a range of $1.850 billion to $1.950 billion and earnings in a range of 6 to 9 cents per share. Adjusted earnings, excluding charges and amortization expense, are estimated to range from 14 to 17 cents per share.
Estimated sales for the full year 2012 range from $7.350 billion to $7.650 billion and estimated earnings range from 25 to 28 cents per share. Adjusted earnings, excluding charges and amortization expense, are estimated to range from 60 to 70 cents per share.
Boston Scientific employs more than 25,000 people worldwide, including about 5,000 in Minnesota. Boston Scientific shares rose 31 cents, or 5.6 percent, to $5.85.
James Walsh 612-673-7428