Boston Scientific Corp. (NSYE:BSX) beat Wall Street’s expectations for the fourth quarter by posting a profit, but still ended full-year 2010 in the red.
The Natick, Mass.-based medical device maker reversing the $1.2 billion loss it posted during Q4 2009, reporting profits of $349 million, or 15 cents per diluted share, on sales of a little more than $2 billion during the three months ended Dec. 31, 2010. The picture was a little more grim for the full year, as BSX posted a $656 million loss, or 70 cents pre diluted EPS, on $7.8 billion in sales (still a 26 percent improvement over the $894 million loss on $8.1 billion in sales it posted in 2009).
The fourth-quarter results topped analysts’ expectations of earnings in range of 8 cents to 12 cents on $1.99 billion in sales.
Company officials said revenues for its cardiovascular group dropped 7 percent to $813 million during the quarter , including a 9 percent decline in its interventional cardiology business and BSX’s flagship Taxus and Promus coronary stent systems. Still, they said, BSX can stake a claim as the industry leader in the “global drug-eluting stent market,” with a 35 percent share of the global market and a 46 percent share of the U.S. market, according to a press release.
For the full year, the cardiovascular unit posted sales of $3.2 billion, down 7 percent from $3.5 billion last year.
An issue that last spring seemed destined to haunt BSX turned out to be more benign that originally anticipated. In March, the company halted all U.S. shipments of its Cognis and Teligen defibrillators for a month after discovering that it failed to file paperwork for changes to its manufacturing process. Officials had anticipated that the defib paperwork flub would cost the company’s top line between $300 million and $500 million.
Instead, the impact was limited to just more than $200 million. U.S. defibrillator sales were $1.04 billion in 2010, compared to $1.25 billion in 2009.
President and CEO Ray Elliot struck a positive tone, saying Boston Scientific made “significant progress” in realigning its portfolio, highlighting the company’s recent acquisitions and the $1.5 billion divestiture of its neurovascular business to Stryker Corp. (NYSE:SYK) as proof. But Elliott cautioned that 2011 would be a “difficult but necessary transition year, in part driven by a worsening pricing environment and uncertainty in procedural volumes.”
That point was hammered home with the company’s estimates for 2011. Elliot said BSX would likely start the year with a $258 million hole from the sale of its neurovascular unit and no new revenues anticipated from its recent acquisitions.
Full-year sales for 2011 are estimated to be between $7.5 billion and $7.9 billion, with estimated GAAP EPS of 53 cents to 68 cents. First-quarter GAAP EPS are pegged to hit 30 cents to 38 cents on sales of between $1.83 billion and $1.93 billion.
