Boston Scientific (NYSE:BSX) shares hit a 52-week high 2 days ago and are flirting with another today, as investors react to strong 4th-quarter and 2012 results.
The Marlborough, Mass.-based medical device company’s stock hit $7.43 per share Jan. 29, the day it announced its financial numbers. Shares had fallen as low as $4.79 apiece during the last 52 weeks.
Today BSX shares hit that high again, trading at $7.43 each as of about 1:50 p.m., up 1.6%.
Boston Scientific posted 4th-quarter profits of $60 million, or 4¢ per share, on sales of $1.82 billion for the 3 months ended Dec. 31, 2012, representing a bottom-line slide of 43.9% and a sales decrease of 1.5% compared with the same period in 2011.
For full-year 2012, the company reported losses of $4.07 billion, or $2.89 per share, on sales of $7.25 billion. That’s a top-line slide of 4.9%.
Boston Scientific also said it’s expanding the streamlining effort it started in 2011, adding 1,000 layoffs to the 1,400 job cuts it’s already put in place. Aiming to pare pre-tax operating expenses by $100 million to $115 million annually by the end of the year, plus the $340 million to $375 million in savings it expects to reap from the 2011 initiative, Boston Scientific said it plans to let another 900 to 1,000 employees go.
Leerink Swann analyst Danielle Antalffy said the results indicate that Boston Scientific could be on a path to sustainable growth after several years in the wilderness.
"While one quarter doesn’t make a trend, we are certainly encouraged by what we believe are stable-to-improving market shares across most businesses and – in particular – within [implantable cardiac devices] and [drug-eluting stents]," Antalffy wrote in a note to investors this week. "But BSX will need to continue managing though markets where growth remains under pressure, with a recovery in procedure volumes still tenuous at best, and price declines likely to continue for the foreseeable future.
"In order for BSX stock to continue to outperform from here, we expect the company will need to successfully execute on: 1) recent and upcoming new product launches; and 2) execute on driving operating margins in-line with or better than management’s current expectation for a ~100 [basis point] decline over the next 12 months."
Stents and cardiac rhythm management devices, both bread-and-butter markets for Boston Scientific that accounted for 54.4% of its revenues during the quarter, have been in decline for the past few years. Sales for the company’s CRM business were off by 4% during Q4 and its interventional cardiology business was down 9%, CEO Michael Mahoney told analysts during a conference call this week.
"While we’re disappointed in our lack of growth, we believe that our U.S. DES share is stabilizing and we were able to grow international DES revenue mid-single digits," Mahoney said.
"[W]ith the upcoming launches of new products, along with the acquisition of BridgePoint Medical‘s suite of CTO devices, we expect to see continued improvement in this business over the course of 2013," added CFO Jeffrey Capello.
As for CRM, Mahoney said the slump seems to be ebbing.
"[W]e believe that the worldwide CRM market continued to show signs of stabilization during the quarter, declining to low to mid-single digits for the full year," he said.
