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Boston Scientific Stock Hits 10-Year High After Q1 Beats Estimates

Medical device maker Boston Scientific ( BSX ) popped to a 10-year high Wednesday after it reported a strong Q1 and raised its guidance. Boston Scientific’s adjusted earnings totaled 28 cents in the quarter, up 33% from the year-earlier quarter and beating analysts’ consensus by four cents, according to Thomson Reuters. Revenue rose 11% to $1.96 billion, beating consensus by about $50 million. Boston Scientific added more than $100 million to its full-year revenue guidance range, now $8.08 billion to $8.23 billion, up 9% at the midpoint vs. $7.48 billion last year. It also added two cents to its full-year EPS guidance, now 64 to 69 cents. The company said that its sales in the current quarter should be $2.01 billion to $2.06 billion, up 10.6% at the midpoint from $1.84 billion a year ago and on the high side of consensus. Its earnings guidance of 25 to 27 cents a share was in line with Wall Street’s estimate and up from 21 cents last year. Boston Scientific stock was up 9.5% in morning trading on the stock market today , near 21.50 and hitting its highest point since May 2006. In a research note Wednesday, RBC Capital Markets analyst Glenn Novarro broke down the results. “Cardiovascular revenues of $790 million (+13% year-over-year constant currency) easily topped our estimates and consensus,” he wrote. “We believe cardiovascular results were led by share gains for Synergy (drug-eluting stent) in the U.S., robust adoption of Watchman (left atrial appendage closure device) and strong peripherals sales. “Meanwhile, MedSurg sales of $682 million (+28% year-over-year constant currency, +11% year-over-year organic) also topped expectations, driven by strong Endoscopy results, owing to Spyglass DS (direct visualization system) and the launch of the Axios stent system, and Urology/Women’s Health.” On the downside, Novarro said that cardiac rhythm management sales were light, which he says is due to Medtronic ( MDT ) taking share in the implantable cardioverter defibrillator market. However, Evercore ISI analyst Vijay Kumar wrote that Monday’s approval of a new MRI-safe suite of pacing products should help boost the division. Boston Scientific’s growth has been picking up the last three quarters, helping drive the stock to a strong IBD Composite Rating of 94.

Medtronic Sales, Operating Margin Mar Otherwise Solid Quarter

Shares of medical-device giant Medtronic ( MDT ) dipped sharply Tuesday after its fiscal Q3 sales missed estimates, though earnings and guidance were in line with expectations. Medtronic’s earnings for the quarter ended Jan. 29 totaled $1.06 a share excluding one-time items, down 1% from the year-earlier quarter and matching the consensus number calculated by Thomson Reuters’ survey of analysts. Sales jumped 61% to $6.93 billion, though adjusted for last year’s buyout of Covidien, as well as foreign-exchange rates, sales increased just 6%. This was about $55 million below consensus. Medtronic affirmed its full-year guidance of $4.36 to $4.40 in EPS, which includes 45 to 50 cents of foreign-currency impact. It did not guide Q4 earnings but said sales should grow 5% to 5.5% excluding the foreign-currency impact, which it sees amounting to $180 million to $220 million. Leerink analyst Danielle Antalffy wrote that the sales miss was largely due to higher-than-expected foreign-exchange headwinds, but there were a few signs of trouble. “U.S. sales growth did slow a bit, coming in at 4% growth vs. our 6% projection and representing a deceleration from the 6% growth seen in (fiscal) Q2 2016 and the 14% growth seen in (fiscal) Q1 2016,” Antalffy wrote. “This slowing growth is likely in large part attributable to increasingly difficult comparables and, to us, doesn’t yet suggest an alarming signal of a broad-based slowdown. “Medtronic did deliver positive operating leverage quarter-over-quarter, with EBIT margins of 27.8% vs. 27.4% last quarter, but this improvement fell below guidance of 28.0%-28.5% and our 28.5% estimate. This now leaves the increasingly positive operating leverage story very much back-end-loaded, with Medtronic having to deliver Q4 operating margins of at least 33.5% to hit its prior guidance for 29%-31% as reported for full-year 2016.” Antalffy also noted that Medtronic’s competitors similarly missed sales estimates in the most recent quarter — among them St. Jude Medical ( STJ ), Boston Scientific ( BSX ) and Johnson & Johnson ( JNJ ) — making Medtronic’s quarter look good in comparison. Medtronic stock was down almost 5% in late-morning trading on the stock market today , near 74. The stock had been relatively buoyant during the market sell-off, closing Monday just a few percentage points below the 52-week high hit last March.

Abiomed, Boston Scientific Move Opposite Ways On Quarterly Reports

Medical device maker Abiomed ( ABMD ) popped in early trading after it beat quarterly estimates and raised guidance Thursday, while its larger counterpart Boston Scientific ( BSX ) was falling after a more mixed report. Abiomed’s earnings for its fiscal Q3 ended Dec. 31 totaled 23 cents a share, down 23% from the year-earlier quarter but well ahead of analysts’ consensus of 15 cents as reported by Thomson Reuters. Sales rose 38% to $85.8 million, about $5 million above consensus. Abiomed raised its revenue guidance for the full fiscal 2016 to $326 million, up from a previous range of $305 million to $315 million. It said that sales in the current quarter should be $90 million, above Wall Street’s estimate of $85.1 million and up from $62.6 million in last year’s fourth quarter. The company didn’t guide earnings, but it did say that gross profit margin should be higher than its previous guidance of 15% to 17%. Abiomed stock was up 5% in morning trading on the stock market today , near 89. The news wasn’t a total surprise, since Abiomed issued preliminary Q3 sales last month that matched the current report. Leerink analyst Danielle Antalffy wrote that the EPS and guidance numbers brought further upside, supporting strong uptake of Abiomed’s Impella heart pump. “In the U.S., Abiomed clearly continues to drive what we believe is sustainable adoption momentum that should continue to ramp with the recent Impella 2.5 PMA (premarket approval), as the company can more aggressively market to physicians than before,” Antalffy wrote in a research note. “This is further supplemented by the Impella RP and upcoming late-calendar-year 2016 Japan regulatory and reimbursement approval.” Boston Scientific Revenue Falls Short Boston Scientific stock was down 4% Thursday morning, near 17, after the company reported Q4 sales of $1.98 billion, up 5% from the prior year’s Q4 but about $16 million below consensus. Profit rose 18% to 26 cents a share, a penny over the Street. Boston Scientific said that sales in the current quarter should be $1.89 billion to $1.94 billion, somewhat on the low side of analysts’ $1.93 billion consensus, though up from $1.77 billion last year. It said earnings will be 23 to 25 cents a share, in line with consensus and up from 21 cents last year. For the year, the company’s sales guidance of $7.9 billion to $8.1 billion bracketed consensus, while EPS was on the high side at $1.03 to $1.07. “Gross margins (in Q4) came in slightly above our expectations, but operating expenses came in well above our estimate driven by higher sales, general and administrative and R&D expenses, that were offset by tax (which we estimate contributed 1 to 2 cents),” Evercore ISI analyst Vijay Kumar wrote in an email to clients. “Overall, in the context of a tough health care tape and concerns over slowdown in emerging markets and ICD (implantable cardioverter defibrillator) share losses, we view today’s print and guidance as solid.” Image provided by Shutterstock .