Boston Scientific reported strong second-quarter results and raised its outlook for 2013. File photo of workers at the company's Maple Grove R&D center.
Evan Ramstad, VIA BLOOMBERG NEWS
Boston Scientific profit tops estimates; shares soar
- Article by: James Walsh
- Star Tribune
- July 25, 2013 - 9:12 PM
It doesn’t take long for Wall Street to react to earnings. And on Thursday, its response to Boston Scientific’s results was immediate. Minutes after the conference call with analysts ended, the company’s stock shot up 12 percent on news that profits beat expectations.
Shares finished the day at $10.83, the highest price since 2009.
The Natick, Mass.-based medical device maker still faces plenty of challenges with its core heart rhythm and stent business. But its bottom line is showing sustained signs of an uptick in the marketplace, with solid gains in Europe and emerging markets.
“We delivered ahead of expectations,” Mike Mahoney, president and CEO, said Thursday. “We planned on returning Boston Scientific to growth in the second half of the year, and we did it in the second quarter. I think people are starting to see the details of that being delivered.”
The medical device giant, which employs about 5,000 people in the Twin Cities, announced sales of $1.8 billion and adjusted earnings of 18 cents per share — both beating the Wall Street consensus. The company earlier guided investors to expect an adjusted profit of 14 to 17 cents per share. After including charges and other costs, Boston Scientific’s net profit amounted to $130 million, or 10 cents a share.
The sales figure amounted to a decline of 1 percent compared to the year-ago quarter, but after excluding the impact of foreign currency fluctuations, the company’s revenue grew 2 percent. Cardiovascular revenue of $719 million were down 4 percent from the same quarter last year, and 1 percent after taking foreign currency costs into account. The company’s rhythm management business had revenues of $511 million, down 2 percent on a constant-currency basis. Not earth-shattering, by any means, but better than most analysts expected. And other businesses proved even more robust.
The company showed growth of 21 percent in its neuromodulation business, 8 percent in endoscopy and 5 percent in peripheral interventions. Medical surgical revenues of $560 million were 9 percent higher than the same quarter last year, after currency impacts. Boston Scientific also reported that its revenue in Brazil, Russia, India and China grew 29 percent.
Reaction to the news was positive. “The BSX thesis — returning to positive top-line growth in the second half of 2013 — seems to be playing out even faster than investors had hoped,” said Danielle Antalffy, analyst at Leerink Swann Research, referring to the company’s stock symbol.
In a note to investors after the results Thursday, Wells Fargo analyst Lawrence Biegelsen said that Boston Scientific’s sales of drug-coated coronary stents, implantable defibrillators and cardiovascular products were all “ahead of our estimates.”
The positive results prompted Boston Scientific to raise its full-year 2013 revenue guidance to a range of $7.05 billion to $7.17 billion. The company raised its full year earnings-per-share guidance to 67 to 71 cents.
And like its rival St. Jude, which showed an uptick in its heart-rhythm business, Boston Scientific expects stronger results as the cardiac rhythm management market moves from stability to a return to growth. In addition, the company will begin shipping its S-ICD, a defibrillator that does not send wires into the heart, in the third quarter and will further expand its global availability in the fourth quarter. Continued growth in neuromodulation, which uses a pacemaker-like device to treat chronic pain and the symptoms of Parkinson’s, also is expected to fuel positive numbers.
“It’s a good day,” Mahoney said. “We have a lot of opportunities and a lot of work to do going forward. But it’s a good day.”
James Walsh • 612-673-7428
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