Updated from 11:40 a.m. EDT
Medical devices maker
lowered its full-year guidance, citing recent acquisitions and an expected new entry in the stent market.
Boston Scientific saw its shares fall $1.14, or 3.7%, to $29.46 Wednesday.
In cutting its forecast, the company cited the recent acquisitions of Advanced Stent Technologies, CryoVascular Systems, Rubicon Medical and TriVascular. On a conference call, the company also said competition could come from
, which said it anticipates approval for the Endeavor coronary stent
"any day now" in Europe.
Boston Scientific currently dominates the stent market, with about a 60% share.
"Management felt it prudent to bring
acquisitions in-house and take ownership of and expedite their clinical and regulatory timelines," Adam Galeon of Credit Suisse First Boston wrote in a research report. "While a sound strategy, BSX now has to bare additional costs." CSFB says it does and seeks to do business with companies it covers.
Joanne K. Wuensch at Harris Nesbitt says the company is taking a momentary "pause," as it invests in 2005-2006 for future growth opportunities. However, "while we continue to think that BSX looks cheap, near term, the catalysts to drive significant price appreciation for BSX just aren't there." Wuensch says. Harris Nesbitt doesn't have an investment-banking relationship with Boston Scientific or Medtronic.
Boston Scientific, based in Natick, Mass., now expects to earn $1.85 to $2 a share for the year, vs. its previous forecast of $2 to $2.20 a share, which the company offered in February. Analysts polled by Thomson First Call had been expecting a profit of $2.06 a share. The company earned $1.63 a share in 2004.
The company expects sales of $6.35 billion to $6.57 billion for the year, compared with the $6.4 billion to $6.7 billion it previously forecast. Analysts were looking for sales of $6.51 billion. Drug-eluting stent sales should range between $2.62 billion and $2.76 billion for the year, the company said. The company previously forecast worldwide drug-eluting stent sales between $2.7 billion and $3 billion.
Boston Scientific said it will wait a few months before issuing 2006 and 2007 guidance, after it learns more about Endeavor's pricing and how the market share is evolving in Europe.
"We're prepared," the company said. "We expected that Endeavor would have been approved by now."