Boston Scientific Corp. (NYSE:BSX) started off 2011 with a $20 million profit, reversing the $1.6 billion loss it posited during the same period last year.
The return to the black should lift some spirits at the Natick, Mass.-based medical device maker’s headquarters. The reaction might be different on Wall Street, where analysts were looking for a little more beef on the bottom line. A consensus estimate culled from 22 analysts on The Street predicted sales in the $1.90 billion range for the three months ended March 31, good for a $64 million profit. But BSX posted the $20 million profit on $1.93 billion in sales, compared to that $1.6 billion loss on $1.96 billion in sales during Q1 2010.
The revenue drop-off was attributed to softer sales for Boston Scientific’s cardiovascular group, which was off last year’s pace by 5 percent. The unit posted $811 million in sales, compared to $855 million for the same period last year, dragged down by an 8 percent drop in the company’s interventional cardiology unit. BSX’s cardiac rhythm management unit fared better, with a 4 percent bump up compared to last year. Its $559 million in sales, compared to $538 million for the same period last year, were paced by strong sales of defibrillator systems, up 8 percent during the quarter. But, once again, stent sales were off, down 13 percent to $193 million.
BSX also took a $723 million estimated goodwill impairment charge associated with its U.S. CRM business unit during the quarter, “primarily due to a reduction in the estimated size of the U.S. Cardiac Rhythm Management (CRM) market,” according to a press release.
“Despite an increasingly challenging U.S. CRM market and the resulting goodwill implications, we had several notable accomplishments during the quarter that illustrate progress toward the achievement of strategic milestones,” BSX president Ray Elliot said in prepared remarks. “Our sales were at the high end of our projected range, we benefited from our cost-reduction initiatives, and we continue to aspire to double-digit EPS growth in the near term.”