Boston's Forecast Comes Up Short

For the third quarter, Boston Scientific's share of the drug-eluting stent market was 55%, below its previous goal of 60%.

The company also offered fourth-quarter estimates that would miss analysts' targets, projecting that sales will be $1.55 billion to $1.59 billion, with earnings of 40 cents to 44 cents a share. Analysts, meanwhile, want a profit of 47 cents and a top line of $1.64 billion.

Considering the third-quarter results and the fourth-quarter forecast, it doesn't come as a surprise that Boston Scientific's full-year outlook is also below expectations.

For 2005, Boston Scientific expects sales ranging from $6.29 billion to $6.33 billion, and earnings, excluding charges, of between $1.81 and $1.85 a share. The consensus forecasts call for sales of $6.42 billion and earnings of $1.90.

Shares of the company were lower by 33 cents, or 1.4%, to $23.97.

"Overall, we were pleased with the solid growth in most of our businesses, with the exception of U.S. drug-eluting stent sales," Jim Tobin, president and CEO of Boston Scientific, said in a statement discussing the third quarter.

The company's domestic businesses brought in $926 million, down 5% as U.S. Taxus sales fell to $403 million from $502 million a year ago.

"If you take [drug-eluting stents] out of the quarter, we grew roughly 10%, rounded up a tad, encompassing all the businesses we have," Best said. Excluding Taxus, he said the company would have seen double-digit growth overall, as well as in its cardiovascular, endosurgery and spinal cord stimulation businesses.

From the second half of 2004 and going into this year, more patients were converting from bare-metal stents to drug-eluting stents, leading to high market penetration, but according to LaViolette, the adoption rates have stabilized since then.