Boston Scientific swings to 3rd-quarter loss
WASHINGTON -- Medical device maker Boston Scientific said Thursday it swung to a third-quarter loss, as legal fees and restructuring expenses weighed down already-sluggish sales of the company's implants.
Shares of the Natick, Mass., company slipped in morning trading as investors reacted to its reduced sales and earnings guidance for the full year.
The company posted a net loss of $725 million, or 52 cents per share, compared with a profit of $142 million, or 9 cents per share, in the third quarter of 2011. The company's most recent results were weighed down by an $809 million write-down of the company's defibrillator business. Acquired in 2006 from Guidant for $27 billion, the unit was plagued for years by recalls and regulatory citations.
Excluding that and other one-time charges, the company would have earned 16 cents per share, up slightly from 15 cents per share in the prior-year quarter.
Sales of heart stents and implantable defibrillators declined, leading to a 7 percent drop in total revenue to $1.74 billion.
Still, adjusted results were better than the average estimate by Wall Street analysts, who predicted earnings of 11 cents per share, although revenue fell short of the $1.77 billion estimate, according to FactSet.
Sales of the company's interventional cardiology division, which mainly consists of stents, fell 20 percent to $494 million in the period.
Sales of cardiac rhythm management devices, including pacemakers and defibrillators, declined 8 percent to $462 million. Use of those devices has declined in recent years amid cost-cutting efforts by hospitals and medical studies suggesting the implants are overused. Defibrillators monitor the heart for dangerous irregular heartbeats and use electrical jolts to shock it back to a normal rhythm. Pacemakers use steady, low-energy electrical pulses to help patients maintain a steady heartbeat.
Sales of smaller divisions like endoscopy rose in the mid-single digits.
"Despite increased competition and ongoing market challenges in our cardiology businesses, we continue to deliver on our adjusted earnings and free cash flow and saw encouraging year-over-year performance in nearly all of our other businesses," CEO Hank Kucheman said in a statement.
For the full year, Boston Scientific expects to post a loss of $2.86 to $2.89 per share, wider than the previous range of $2.09 to $2.16 per share. The adjusted profit is now seen at 63 cents to 66 cents per share, versus prior guidance of 62 to 68 cents per share.
Revenue guidance was reduced to between $7.17 billion and $7.24 billion from $7.2 billion to $7.4 billion. Analysts predict revenue of $7.26 billion, on average.
Shares of Boston Scientific Corp. fell 21 cents, or 3.7 percent, to $5.41 in morning trading.