A combination of tax settlements, manufacturing efficiencies and growing sales of some devices helped propel the quarterly earnings for medical device maker Boston Scientific Corp. past stock analysts' estimates for the final quarter of 2018.

Boston Scientific Corp., maker of vascular and heart devices in Minnesota, posted adjusted earnings of 39 cents per share, beating analysts' consensus expectations by 2 cents and rising 15 percent compared to the same quarter last year. Quarterly revenue of $2.56 billion was in line with pre-announced revenue, climbing 7 percent organically over the same quarter last year.

"Meaningful innovation and focused execution helped us deliver strong financial results in 2018," Chief Executive Mike Mahoney said in a news release. "We remain driven by the opportunity to help more patients with our life-changing technologies, including a robust long-term pipeline of new devices and therapies."

Boston Scientific stock rose 2.7 percent Wednesday to $38.77, on a day when the S&P 500 was flat.

The Massachusetts-based company, which employs thousands at sites in Maple Grove and Arden Hills, saw organic quarterly revenue growth in all three of its business segments, including 7.7 percent growth in cardiovascular device sales, 6.6 percent in heart-rhythm and neuromodulation devices, and 6.2 percent in medical/surgical supplies.

The U.S. launch of the Maple Grove-designed Eluvia drug-eluting stent for peripheral artery disease was a driver of double-digit growth in the quarter, Mahoney said, helping to drive 11 percent revenue growth in Boston Scientific's $300 million business in vascular devices used in the limbs.

An article in the Journal of the American Medical Association in December raised concerns about paclitaxel-containing devices such as Eluvia, but Mahoney said more detailed data from the companies and a letter from the Food and Drug Administration was reassuring many physicians.

"We believe the FDA's recent letter stating that the benefits of paclitaxel-coated devices outweigh the risks, as well as compelling patient level data sets [presented at industry conferences] ... will serve to reassure physicians and their patients regarding the safety and efficacy of our DCB and DES platforms," Mahoney said, describing drug-coated balloons (DCB) and drug-eluting stents (DES).

The cardiac-rhythm division, based in the Twin Cities, grew less than 2 percent in the quarter, to $488 million in sales. The division saw sales gains in devices like the Resonate family of implantable heart defibrillators, which are compatible with MRI scanners, and the Emblem subcutaneous defibrillator, which has a lead that doesn't need to touch the heart to work. That growth offset "high single-digit declines" in sales of pacemakers.

Meanwhile the interventional cardiology business grew faster than the market, with 6 percent organic growth in the quarter to $668 million. Growth was led by worldwide demand for the Watchman left atrial appendage closure device, which was designed by physicians in Minnesota to prevent strokes by blocking off an obscure recess of the heart where clots can form in people with atrial fibrillation.

"In the U.S., Watchman recently received an increase in its primary [Medicare] reimbursement starting last October, and we're also pleased that Watchman was just recently included in the new A-Fib guidelines update," Mahoney said.

Looking at 2018 as a whole, Boston Scientific grew full-year earnings by 17 percent in 2018, including the positive impact of settlements with the IRS that resolved more than a decade's worth of disputed back taxes.

The full-year EPS came in at $1.47, but that figure includes 7 cents of benefit per share to the bottom line from the tax settlements that covered disputed "transfer pricing" taxes on goods made outside the U.S. between 2001 and 2013. "This effectively concludes the IRS transfer-pricing case," Chief Financial Officer Dan Brennan told investors Wednesday morning.

Total revenue in 2018 stopped just shy of the $10 billion mark, climbing 8 percent on an organic basis to $9.8 billion. Full year adjusted net income was $2 billion, an increase of almost 18 percent.

Looking ahead, Boston Scientific said it expects to increase its organic revenue in a range between 7 percent and 8.5 percent for the full year of 2019, including an estimated $700 million to $725 million in sales of key "structural heart" products like the Watchman.

All told, revenue growth in 2019 is expected to help generate adjusted earnings in a range of $1.53 to $1.58 per share. That would compare to full-year earnings in 2018 of $1.40, after removing the one-time effects of the IRS tax settlements.

Analysts with Leerink Partners said that the 2019 earnings guidance is likely on the conservative side, saying: "While we think investors might have hoped for more on the EPS guide, we also think management is exercising their normal level of conservatism to start the year. We also believe investors are most focused on sales growth."

Joe Carlson • 612-673-4779