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Earnings preview: Cardiovascular to drive Boston Scientific Q4 results

Boston Scientific Corporation (BSX) is set to report its fourth-quarter earnings results on Wednesday before the bell. The medical device manufacturer’s results will be driven by stable demand across all operating segments and geographical regions.

Investors remain positive about the major contribution from the Cardiovascular business group, which comprises Interventional Cardiology (IC) and Peripheral Interventions (PI). The company has exceeded analysts’ expectations for three consecutive quarters.

Analysts expect Boston Scientific to post earnings of $0.37 per share on revenue of $2.56 billion for the fourth quarter. In comparison, during the previous year quarter, the company reported a profit of $0.34 per share on revenue of $2.41 billion. Majority of the analysts recommended a “strong buy” or “buy” rating while expecting the stock to reach $42.22 per share in the next 52 weeks.

The robust commercial teams and innovative portfolio could remain as the backbone of IC business for maintaining its global growth. The IC business growth would be benefited by the complex percutaneous coronary intervention (PCI) products despite a decline in the coronary drug-eluting stent business. The company’s Structural Heart results will be aided by Watchman, Acurate and Iris product lines as well as the recently acquired Clarent Medical.

The growth in the peripheral arterial disease, venous and interventional oncology drugs could drive the PI business higher. After the launch of Eluvia drug-eluting stent in the US, the quarterly results could be benefited by the large patient audience, differentiated, sustained-release technology and superior clinical outcomes with minimal need for reintervention.

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In the third quarter, Boston Scientific posted a 53% jump in earnings driven by higher other income as well as an increase in the top line. Net sales increased by 7.7% on higher sales growth across all segments. Sales at MedSurg division grew 10.3% while the Rhythm and Neuro segment registered a 7.4% gain. Cardiovascular sales were higher by 5.9% compared to last year.

Looking ahead into the full year 2018, the company had expected revenues in the range of $9.787 billion to $9.827 billion and earnings in the range of $1.08 to $1.10 per share. Adjusted earnings were anticipated to be in the range of $1.37 to $1.41 per share.

For the fourth quarter, the company had predicted sales in the range of $2.525 billion to $2.565 billion and earnings in the range of $0.15 to $0.17 per share. Adjusted earnings were projected to be in the range of $0.30 to $0.32 per share.

Investors were concerned about the ongoing trade tariff tensions between the US and China as the top line numbers could be hurt by a single adverse move for the coming quarters. The company is already gaining presence in the emerging markets of Brazil, Russia, India, and China (BRIC) and currently targeting about 10 emerging markets for additional emphasis.

Shares of Boston Scientific opened lower but changed course to the green territory on Monday afternoon. The stock has risen over 38% in the past year and over 3% in the past three months.

 

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text.

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