Boston Scientific 2Q profit helped by lower costs

NATICK, Massachusetts - Boston Scientific Corp. said Monday its profit grew 61 percent in the second quarter on lower acquisition and restructuring costs and higher sales to beat Wall Street estimates.

The medical device maker posted net income of $158 million, or 10 cents per share, up from $98 million, or 7 cents per share, in the same period last year. Excluding one-time charges related to tax items and acquisition costs, the company would have earned 20 cents per share.

Sales ticked up 2.5 percent to $2.07 billion. Excluding the impact of unfavorable foreign currency rates, the company said sales would have risen 7 percent.

Analysts polled by Thomson Reuters expected profit of 13 cents per share on revenue of $2.05 billion. Such estimates generally exclude one-time items.

Boston Scientific said it expects third-quarter earnings per share between 8 and 13 cents per share. Full-year earnings are expected to range between 47 and 53 cents per share, slightly lower than the company previously forecast.

Analysts expect earnings per share 57 cents per share for the year.

Company shares jumped more than 5 percent in after-hours trading to $10.86 per share.

"We delivered sales and earnings at the high end of our guidance range with almost all businesses and regions reporting solid results," said new Chief Executive Ray Elliot.

Boston Scientific announced last month Elliot would replace prior CEO Jim Tobin, who had led the company for about 10 years. During his tenure, Tobin oversaw the $27 billion acquisition of heart device maker Guidant Corp. in 2006, which sharply increased Boston Scientific's debt.

But sales of implantable heart-shocking devices — acquired from Guidant — were a key earnings driver in the quarter. Sales of the company's heart device unit rose 10 percent to $405 million, helped by a 13 percent increase in implantable cardiac defibrillators. The devices use powerful electric jolts to correct irregular heart rhythms. Pacemakers, by contrast, use low-voltage electrical currents to keep hearts beating.

The company also sells stents, which are mesh-metal tubes that are used to prop open arteries after they have been surgically cleared of plaque.

Boston Scientific reported Monday stent sales increased to $253 million in the quarter, from $200 million. Sales of drug-coated stents — which are specially designed to prevent reclogging — grew 14 percent. The company also reported its stake of the U.S. drug-coated stent market increased to 50 percent, up from about 41 percent in the same period last year.

Other competitors in the market are Johnson & Johnson and Abbott Laboratories.

Last month the company received U.S. regulatory approval for a longer version of its Taxus Liberte stent, which is designed to reduce the number of stents needed for certain procedures.

Boston Scientific said Monday about 40 percent of its earnings in the last quarter came from new devices.

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