Boston Scientific Corp. (BSX) swung to a third-quarter profit as
the company recorded a small revenue increase and much smaller
unusual charges.
However, the medical-device maker lowered its earnings outlook
for the year, despite boosting its revenue target. The company now
targets earnings of 75 cents to 79 cents, excluding items, down
from its July view of 82 cents to 86 cents. However, it now sees
revenue of $8.13 billion to $8.23 billion, up from $8.1 billion to
$8.14 billion.
Following the news, shares were down 2.6% to $9.90 in
after-hours trading. The stock is up by about 30% this year.
Concerns about broader problems for the medical-devices sector
escalated earlier this month when St. Jude Medical Inc. (STJ)
issued soft preliminary third-quarter results linked to a hospital
belt-tightening.
The industry is also fighting $4 billion in annual fees
targeting the industry as part of a proposed health-care bill,
saying the cost would have devastating effects on business
growth.
On Monday, Boston Scientific reported earnings of $200 million,
or 13 cents a share, compared with a year-ago loss of $62 million,
or 4 cents a share.
The latest results included a credit with the reduction of
previously recorded litigation reserves, offset by restructuring
and amortization costs, while the prior year included $298 million
in impairment, restructuring and other charges.
Excluding those items, earnings rose to 19 cents from 16
cents.
Net sales climbed 2.4% to $2.03 billion. Excluding currency
translation and sales from divested businesses, sales were up
3%.
In July, the company projected per-share earnings of 17 cents to
21 cents on revenue of $2 billion to $2.1 billion.
Gross margin improved to 68.9% from 66.9%.
Worldwide sales of the company's stents, tiny metal scaffolds
used to prop open heart arteries, increased 1.3%, with revenue up
3.5% in the U.S. and rising 0.9% abroad.
Sales trends for Boston Scientific's stents were being closely
watched by analysts after two studies showed an Abbott Laboratories
(ABT) heart stent worked better.
Worldwide sales of heart-rhythm management devices, including
implantable cardioverter defibrillators, or ICDs, grew 5.6%, as
U.S. sales jumped 6.6% and sales abroad climbed 3.4%.
Looking ahead, the company projected fourth-quarter per-share
earnings, excluding items, of 17 cents to 21 cents on revenue of
$2.03 billion to $2.13 billion. Analysts surveyed by Thomson
Reuters expected 17 cents and $2.11 billion, respectively.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com