Boston Scientific (NYSE:BSX) took a writedown for the 2nd consecutive quarter today, posting a 3rd-quarter loss and lowering its sales outlook for the rest of the year.
Still, excluding 1-time items, the Natick, Mass.-based medical device company managed to beat Wall Street’s expectations by a penny.
BSX logged a net loss of $725 million, or 52¢ per share, on sales of $1.74 billion for the 3 months ended Sept. 30. That represents a 7.4% top-line slide.
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Adjusted EPS were 16¢, just topping the 15¢ consensus on The Street.
BSX shares were down 2.5% to $5.48 in pre-market trading this morning before opening at $5.50. Shares were trading at $5.38 as of about 10:20 a.m., down 4.4%.
Boston Scientific said the estimated $809 million writedown was based on "the impact of an estimated (pre and post-tax) goodwill impairment charge" for its cardiac rhythm management business, "primarily driven by the reduction in the estimated size of the U.S. CRM market and related adjustments to the business, and other competitive factors, which led to lower projected U.S. CRM results compared to prior forecasts." The final number will be between $700 million to $900 million, the company said.
BSX took a massive $3.43 billion non-cash impairment of goodwill to its bottom line last quarter, when it reported a $3.40 billion net loss on $1.82 billion in sales. That writedown was pegged to "slightly lower projected long-term growth rates due to macroeconomic factors and its performance in the European market," the company said at the time. The most recent writedown is the 3rd since April 2011, when Boston Scientific recorded a $723 million charge related to the weakening U.S. CRM market.
The CRM unit, which accounted for about 27% of total 3rd-quarter 2012 sales, slid 8.2% to $462 million compared with Q3 2011. Boston Scientific’s largest division, interventional cardiology, posted a 19.4% decline, plunging to $494 million for the quarter. The division accounted for some 28% of BSX’s sales in the just-ended period.
The medtech maker’s 3rd-largest division, however, grew 4.0% to $310 million; its peripheral intervention, urology/women’s health and neuromodulation segments also reported gains.
"Despite increased competition and on-going market challenges in our cardiology businesses, we continue to deliver on our adjusted earnings and free cash flow and saw encouraging year over year performance in nearly all of our other businesses," interim CEO Hank Kucheman, presiding over his final earnings report, said in prepared remarks. "We remain focused on executing our strategy to drive this organization back to revenue growth, as evidenced by recent regulatory approvals and acquisitions, and continued progress on our cost optimization initiatives."
Johnson & Johnson (NYSE:JNJ) veteran Michael Mahoney is slated to take the helm at BSX in November.
Looking ahead, Boston Scientific once again lowered its sales guidance from $7.2 to $7.4 billion previously to between $1.74 billion and $1.82 billion, forecasting losses of $2.89 to $2.86 per share and adjusted EPS of 63¢ to 66¢.
The company also said it bought back approximately 46 million shares of its own stock, taking to total in the last 18 months to about 169 million shares, or 11% of its common stock.
