A rebounding Boston Scientific Corp. (NYSE:BSX) said it plans to eliminate up to 1,400 jobs as part of a restructuring program aimed at saving between $225 million to $275 million annually by 2013.
The job cuts are "designed to strengthen operational effectiveness and efficiencies, increase competitiveness and support new investments, thereby increasing shareholder value," according to a press release. The announcement came as part of the Natick, Mass.-based medical device giant’s second-quarter earnings release. The company beat Wall Street’s expectations and raised its sales and earnings guidance, sending share prices up nearly 10 percent in early-morning trading.
Boston Scientific reported profits of $146.0 million, or 10 cents per diluted share, on sales of $1.98 billion during the three months ended June 30. That’s a bottom-line increase of 49.0 percent and boost to diluted EPS of 66.7 percent, compared with Q2 2010. Back then net income was $98.0 million, or 6 cents per share, on sales of $1.93 billion.
The numbers beat The Street’s expectations and BSX’s own predictions, prompting the company to boost its EPS guidance for the rest of the year. A panel of 24 analysts polled by MarketWatch had forecast earnings of 9 cents per share.
Investors might also have liked BoSci’s most recent move to pay down its debt load, a $750 million pre-payment of the balance of its term loans that reduced its gross debt load to $4.2 billion. The company said it’s paid down more than $1.8 billion in debt ahead of schedule during the past year. It also announced a new, $1.0 billion plan to buy back shares of its own stock (on top of 37 million shares remaining in a prior repurchasing plan).
Boston Scientific said it expects full-year sales of between $7.68 billion and $7.88 billion, up from prior guidance of $7.60 billion to $7.90 billion, and adjusted EPS of 64 cents to 70 cents, up from 58 cents to 68 cents.
BSX shares were trading at $7.46 per share as of about 10 a.m. today, up more than 11 percent.
The restructuring program is aimed at saving $225 million to $275 million by the end of 2013. The job cuts will begin this quarter and continue through the end of 2013, with between 1,200 and 1,400 positions eliminated.
The program is projected to cost between $155 million and $210 million, up to $200 million of that in cash. About $10 million of that will come during the third quarter this year, the company said.
It’s not all layoffs at Boston Scientific these days, however. The company announced a plan yesterday to increase its workforce in China six-fold over the next five years with a $150 million investment. BoSci said it aims to increase sales in the People’s Republic to more than $500 million by 2017, about 25 percent of its estimate of the market there.
MassDevice keeps a close eye on public medical device companies, tracking their quarterly sales and earnings reports. For the most recent filings, check out our Earnings Roundup, where we collect each quarter’s reports.
Here’s a quick rundown of a few releases over the past couple days:
Hill-Rom’s legacy legal settlement sinks earnings
Hill-Rom Holdings Inc.’s (NYSE:HRC) earnings sank deep on a $30 million after-tax potential legal settlement charge. The Batesville, Ind.-based company posted a 6.7 percent increase in sales to $384 million for the three months ended June 30, compared to $361 million for the same period last year.
The company’s earnings took a 95 percent hit, coming in at $1.5 million, or 2 cents per diluted share, compared to last year’s Q2 profits of $30.6 million, or 48 cents per diluted share.
Invacare leaps out of the red
Invacare Corp.’s (NYSE:IVC) Q2 sales showed modest growth during the three months ended June 30, coming in at $466 million, a 8 percent increase over $431 million for the same period last year.
Earnings shot out of the red for the Elyria, Ohio-based company which reported $11 million in profit, compared to a $611,000 loss for the same period last year. Diluted earnings per share were 32 cents for this year’s second quarter, compared to a 2 cent loss last year.
Neoprobe lowers losses
Neoprobe Corp. (NYSE Amex:NEOP) touted a 26 percent increase in sales for the three months ended June 30 to $3.2 million, compared to $2.5 million during the same period last year.
The Dublin, Ohio-based oncology and orthopedics company posted losses of $2.2 million, or 2 cents per diluted share, a 95 percent improvement from Q2 2010’s $43 million in losses, or 64 cents per diluted share.
Losses for the Minneapolis company grew 43 percent to $1.3 million, compared to $929,000 lost during the same period last year. Diluted earnings per share stayed flat at 6 cents.
The Waltham, Mass.-based company’s lost $2.4 million, or 11 cents per diluted share, during the three months ended June 30, which is 46 percent less lost compared to the $4.5 million, or $2.00 per diluted share, lost during Q2 2010
Greatbatch posts a stable quarter
Greatbatch Inc. (NYSE:GB), a New York-based medical device company, posted 4 percent growth in sales to $147 million during the three months ended July 1, compared to $141 million sold during the same period last year.
Net profit grew by about 10 percent to $8.6 million, or 40 cents GAAP per diluted share, compared to $7.8 million, or 30 cents GAAP per diluted share, during Q2 last year.
Earnings sank 30 percent to $2.3 million, or 8 cents per diluted share, compared to last year’s $3.4 million, or 12 cents per diluted share.
Palomar sinks deeper in the red
Palomar Medical Technologies Inc. (NSDQ:PMTI) posted slightly improved sales of $16.3 million, 4 percent higher than the $15.6 million posted during the second quarter of last year.
Losses for the quarter came to $4 million, or 21 cents lost per diluted share, more than double the $1.7 million, or 9 cents per diluted share, lost during the same period last year.
Spectranetics hits record sales and huge losses
Spectranetics Corp. (NSDQ:SPNC) hit a sales record at $32 million during the three months ended June 30, a 7 percent improvement over the $30 million sold last year.
The company’s losses increased more than five-fold to $584,000, earning 2 cents per diluted share, compared to $91,000 in losses last year.
Zoll posts a strong quarter
ZOLL Medical Corporation (NSDQ:ZOLL) saw a 23 percent bump in sales for the three months ended July 3 to $136 million, compared to $111 million during the same period last year.
Earning jumped 67 percent to $9.5 million, or 42 cents per diluted share, compared to Q2 of 2010’s $5.7 million, or 26 cents per diluted share
Wright pulls up in Q2
Wright Medical Group (NSDQ:WMGI) posted modest growth in sales during the three months ended June 30 to $133 million, a 4 percent increase over $128 million sold during the same period last year.
Profits increased 27 percent to $6.1 million, or 16 cents per diluted share, over $4.8 million, or 13 cents per diluted share, posted in Q2 of last year.
The company stayed in the red with losses of $10 million, or 54 cents lost per diluted share, a 2 percent decrease in losses from Q2 2010’s $10.2 million lost, or 57 cents lost per diluted share.