UPDATE 2-Boston Scientific 2nd-quarter profit beats, shares rise
July 25 (Reuters) - Boston Scientific Corp on Thursday reported a second-quarter profit that beat expectations and forecast growth in the third period on improved sales of its surgical devices and cardiology products.
Shares rose 9.1 percent to $10.49 in early trading.
The company, which named a new chief executive, Mike Mahoney, in November, raised its outlook for 2013. It has been trying to stabilize sales after a loss of more than $3 billion a year ago due to a charge in its overseas business.
Boston Scientific, like many medical device makers, has struggled with weak sales for the last several years as people lost their jobs and health insurance and delayed medical procedures. Demand also fell as governments around the world cut spending on healthcare.
Chief Financial Officer Jeff Capello said during a conference call he expects pressure on pricing and from putting off procedures to persist this year, but there signs that it will moderate.
He said he saw progress ahead. "We're beginning to improve our global execution in both the (interventional cardiology) and (cardiac rhythm management) markets, and we're aiming to grow ... share in the second half of '13," Capello said during the call.
Boston Scientific has cut jobs as demand fell and it lost market share for heart stents and implantable heart defibrillators, its two largest businesses.
Sales of stents fell about 5 percent to $520 million in the second quarter, representing a slower decline than it experienced in the first quarter, and sales of defribillators fell 3 percent, also a slower fall. Sales in neuromodulation, which includes implantable therapies to manage pain, increased 21 percent. Total revenue fell 1 percent.
The company said the medical device tax, which went into effect at the beginning of 2013 as part of President Barack Obama's healthcare reform law, lowered its profit margin by about 1 percent in the second quarter. The government collects an across-the-board tax of 2 percent on sales from medical equipment makers.
SWINGS FROM A LOSS
The company posted net income of $130 million, or 10 cents a share, compared with a loss of $3.6 billion, or $2.51 a share, a year earlier, when it took a charge to reflect lower projected long-term growth rates in Europe.
Revenue fell 1 percent to $1.81 billion. Analysts, on average, expected a decline to $1.78 billion, according to Thomson Reuters I/B/E/S. Sales in the neuromodulation division rose 21 percent.
Excluding asset impairment charges, acquisition-related items, restructuring charges and amortization expenses, it had adjusted earnings of 18 cents per share, 3 cents more than analysts expected, according to Thomson Reuters I/B/E/S.
On that basis, it expects earnings of 14 cents to 16 cents per share in the third quarter on sales of $1.7 to $1.76 billion.
For the year, it anticipates adjusted earnings of 67 cents to 71 cents per share and a net loss of 1 cent to 7 cents per share.