Boston Scientific

(BSX) - Get Report

Tuesday reported sharply higher third-quarter financial results, beating Wall Street estimates, and confirmed that it has recovered from this summer's recall of some of its Taxus drug-coated stents.

"I think we put the recall chapter behind us," Jim Tobin, the company's chief executive and president, told analysts and investors in a Tuesday telephone conference call.

The Natick, Mass.-based medical device company said it earned $404 million, or 47 cents a share, on revenue of $1.48 billion for the three months ended Sept. 30, excluding special charges. The consensus view of analysts polled by Thomson First Call was a profit of $399.7 million, or 46 cents a share, on sales of $1.45 billion excluding charges.

Boston Scientific, however, incurred a number of special charges, including a $71 million enhancement to its company's 401(k) retirement plan and $75 million "for legal and regulatory exposures." The company declined to discuss details.

When special charges are included, Boston Scientific earned $258 million, or 30 cents a share, on revenue of $1.48 billion. For the same period last year, the company earned $124 million, or 15 cents a share, on revenue of $876 million last year.

The company also said it was essentially sticking to previous guidance for the fourth quarter and the fiscal year ending Dec. 31.

Lawrence C. Best, the chief financial officer, said Boston Scientific would probably meet the fourth-quarter EPS guidance range of 48 cents to 51 cents, adding that analysts should "focus on the low end" of the range, namely 48 cents. He said the company should hit the middle of its sales guidance for the quarter, which ranges from $1.51 billion to $1.58 billion.

For the fiscal year, Best said EPS would come in around $1.60 to $1.63, well within previous guidance of $1.50 to $1.85 per share. With full-year sales guidance at $5.49 billion to $5.58 billion, Best said the most likely result would be around $5.5 billion.

Analysts polled by Thomson First Call were looking for fourth-quarter EPS of 51 cents and a full-year EPS of $1.64. They were looking for fourth-quarter sales of $1.56 billion and full-year sales of $5.57 billion.

Boston Scientific's stock was down 51 cents, or 1.4%, to $37.30 Tuesday.

The Quarter in Review

"With nearly 70% sales growth, 200% earnings growth and 80% gross margins, this quarter was one of the best performances in our history," Tobin said.

Boston Scientific was led by its stent business, which produced third-quarter sales of $686 million, a 405% increase over the same period last year. The Taxus drug-coated stent contributed $640 million of total stent revenue.

The Taxus stent is inserted into arteries to ease blood flow. The tube-like stent is inserted after potentially dangerous artery-clogging plaque has been cleared from blood vessels. Drug-coated stents release a chemical periodically, reducing the risk of arteries re-clogging.

Boston Scientific has become the U.S. market leader in drug-coated stents, overcoming the sales of Cypher, made by

Johnson & Johnson

(JNJ) - Get Report

. Several other companies are working on drug-coated stents, including

Medtronic

(MDT) - Get Report

,

Guidant

(GDT)

,

Abbott Laboratories

(ABT) - Get Report

and Conor Medsystems.

Boston Scientific appears to have shaken off the effects of

three stent recall announcements in July and August affecting 88,200 Taxus stents and 11,000 uncoated arterial stents.

Paul A. LaViolette, the senior vice president supervising the stent businesses, said Tuesday that the U.S. Taxus business is "stronger today than before the recall." For the third quarter, he said Boston Scientific had 64% of the U.S. drug-coated stent market. However, late in the quarter and early into the fourth quarter, he said Boston Scientific's U.S. market share was approximately 70%. U.S. Taxus sales were $484 million for the third quarter.

LaViolette said the Food and Drug Administration, which has inspected the two Taxus-making plants, has "no open questions" for the company. No further meetings are scheduled with the agency, he said.