Boston Scientific Corp., a medical device maker with major operations in Minnesota, saw profits rise 13 percent in the third quarter as sales grew at all of its divisions.
Overall sales rose 11 percent — the third consecutive quarter of growth exceeding 8 percent. Executives said in an earnings call Wednesday that they expect mid-single-digit percentage growth in revenue next year as well.
Although Boston Scientific stock dropped 35 cents to $22.09 Wednesday, stock analysts said the company’s positive financial news stood in contrast to what other med-tech companies have reported so far in third-quarter results.
“Certainly some [companies] that have gone before you [in the quarter] were starting to make investors nervous. So, congrats on a great quarter,” Bank of America analyst Bob Hopkins said, according to a transcript of the earnings call.
Boston Scientific executives believe the company is well-positioned to continue growth, but hurdles remain.
The company expects to pay sizable sums to the IRS for disputed taxes and to women who say they were injured by the company’s pelvic mesh devices, but executives don’t expect to have to borrow money next year to cover those costs, Chief Financial Officer Dan Brennan said Wednesday.
Boston Scientific also doesn’t expect to get Food and Drug Administration approval to sell an MRI-safe implantable defibrillator until next year, but officials expect sales to recover quickly, as they did in Europe once MRI-safe approval was secured there. “We believe the same performance we are seeing in Europe ... portends what we will see in the U.S.,” said Dr. Ken Stein, chief medical officer of the cardiac-rhythm management (CRM) division.
In response to analysts’ questions, CEO Mike Mahoney said Boston Scientific has not seen a boost in defibrillators sales this month after competitor St. Jude Medical revealed that a small percentage of its 350,000 implanted defibrillators have batteries that may lose power with little warning. But neither has it seen sales decline over fears of similar problems, he said.
Boston Scientific makes its own defibrillator batteries at a factory in Arden Hills. St. Jude buys its batteries from an unnamed third party.
Boston Scientific’s adjusted net income grew to $368 million on surprisingly strong revenue of more than $2.1 billion for the three months ended Sept. 30.
The revenue total came in 1 percent higher than Wall Street analysts had forecast, and higher than the company’s own guidance of up to 10 percent revenue growth for the three-month period.
Earnings per share were in line with expectations, at 27 cents per share, which was three cents higher than the same quarter last year.
The fastest-growing part of the company was the medical-surgical group, which grew 15 percent on sales of medical devices and supplies for endoscopy, urology and neuromodulation. The group of products for minimally invasive vascular procedures grew 13 percent. CRM device sales were up 4 percent.
The company raised guidance for its full-year results. Boston Scientific is now projecting full-year revenue of up to $8.38 billion, which would be a 12 percent operational growth, and adjusted earnings of between $1.09 and $1.11 per share.
For the fourth quarter, the company is expecting sales of up to $2.19 billion and adjusted earnings of 27 cents to 29 cents per share.