Medical device maker
swung to a profit in the third quarter and reported sales that were in line with analysts' estimates despite stent revenue edging lower.
Results came in at the high end of the company's own expectations. However, when the company released its guidance last month, analysts had been expecting more.
Sales were $2.03 billion in the quarter, compared with $1.51 billion a year ago and the $2.02 billion analysts were expecting. Before the company provided guidance of between $1.97 billion and $2.04 billion, analysts had been expecting sales of $2.17 billion.
All told, the company earned $76 million, or 5 cents a share, including a $77 million charge related to the acquisition of defibrillator maker Guidant. Last year, Boston Scientific lost $269 million, or 33 cents a share.
Excluding certain charges, the company earned $291 million, or 20 cents a share, in the most recent quarter. The 2005 third quarter included a charge of $616 million, or roughly 75 cents a share, from a settlement agreement with Medinol.
Sales of Boston Scientific's Taxus stent were $572 million for the quarter, down from $601 million a year ago. In the U.S., Taxus sales were $384 million, compared with $404 million last year. The company expected to report sales of the stent between $550 million and $580 million, including $370 million to $380 million in the U.S. Overall worldwide stent sales, which include bare-metal stents, came in at $600 million for the quarter.
Without a doubt, drug-eluting stent (DES) sales took a hit following research data showing concerns about late stent thrombosis, said Boston Scientific's chief operating officer Paul LaViolette in the company's conference call after the close of trading Wednesday.
Late stent thrombosis is a rare condition that occurs when a blood clot blocks a stent some time after implantation, potentially causing heart attack or cardiac arrest. According to research, which was confirmed by the company, more cases of the condition occurred in patients studied with drug-eluting stents implanted as opposed to those with bare-metal stents.
While the company maintains that the drug-coated stents are just as safe as bare metal stents, research findings showed a "small but significant" difference in the occurrence of late stent thrombosis, LaViolette said.
The company says it plans to clear up any confusion about the safety of the devices at the Transcatheter Cardiovascular Therapeutics conference next week and it expects the clarification to eventually benefit the overall DES market.
In Boston Scientific's cardiac rhythm management segment, quarterly sales reached $446 million worldwide, including $315 million in sales of its implantable cardioverter defibrillators and $131 million in pacemaker sales. The company's guidance called for CRM sales between $420 million to $450 million in the third quarter.
Boston's share of the implanted defibrillator market fell 5% in the quarter following the company's communications with doctors regarding the safety of the devices, the company reported during its conference call. As a result, the company saw higher-than-normal turnover of its CRM sales force in July and August but says it stabilized in September.
"Things are moving in the right direction," LaViolette says. "It's not showing up yet in the numbers and it won't for a while, but I have a sense that things have started to turn."
"Despite the challenges in
the third quarter, we were able to achieve results near the high end of our previously announced preliminary sales and earnings ranges," said Jim Tobin, president and CEO of Boston Scientific in a prepared statement.
Shares were up 62 cents, or 4%, at $15.76, in late-afternon trading Thursday.