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Will Recall Issue Hurt Boston Scientific (BSX) Q3 Earnings?
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Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2017 results before the opening bell on Oct 26.
Last quarter, the company delivered a positive earnings surprise of 3.23%. The trailing four-quarter average beat is pegged at 0.84%. Let’s see how things are shaping up prior to this announcement.
Key Catalysts
We are optimistic about the company’s gradually improving performance in Interventional Cardiology (IC), led by an innovative portfolio and robust commercial teams globally. The company while gaining share in a number of cardiovascular segments and DES (Drug Eluting Stent). continues to build momentum globally.
Boston Scientific Corporation Price and EPS Surprise
However, ahead of earnings release, we believe the quarter’s IC business to be grossly impacted by the company’s product recall issue within Europe. Notably, last February, the company recalled one of its prime products, the Lotus range of heart devices from Europe due to device malfunctions. The company also delayed submission of its U.S. marketing application for its Lotus Edge device.
The above product line has little hope to return to the European and other markets before the fourth quarter. This might lead to a major setback for the company’s fast-growing transcatheter aortic valve replacement (TAVR) business within IC in the soon-to-be-reported quarter.
While we believe the downbeat IC business to earn some boost from the company’s recent $435-million acquisition of Switzerland-based Symetis SA, a full recovery may take time.
Accordingly, the Zacks Consensus Estimate for third-quarter IC revenues is currently pegged at $580 million, lower than the sequentially last quarter’s reported number of $603 million.
Other Factors at Play
Among the segments, MedSurg is expected to demonstrate a consistent performance, led by endoscopy. Urology and Women’s Health are also estimated to grow beyond market levels, driven by investment strategies in key international geographies.
The Zacks Consensus Estimate for third-quarter endoscopy revenues is pegged at $403 million, significantly higher than the year-ago quarter’s reported figure of $367 million. For Urology and Women’s Health, the current Zacks Consensus Estimate of $266 million remains ahead of the year-ago reported tally of $248 million.
On the flip side, severe currency headwinds that Boston Scientific has been facing of late, remain a concern. In fact, as the company records 47% of its sales from international markets, it remains highly exposed to currency fluctuations. In 2017, Boston Scientific expects an unfavorable foreign exchange challenge to the tune of $85 million on revenues and 700 bps or 8 cents per share on earnings.
Overall, Boston Scientific’s third-quarter 2017 adjusted earnings are expected in the band of 29-31 cents per share on revenues of $2.18-$2.21 billion.
Here’s what our quantitative model predicts:
Boston Scientific does not have the right combination of two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for increasing the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks ESP: Boston Scientific has an Earnings ESP of +0.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Boston Scientific carries a Zacks Rank #4 (Sell), which fails to increase the predictive power of ESP.
Stocks to Consider
Here are a few medical stocks worth considering with the right combination of elements to beat estimates this quarter:
Thermo Fisher Scientific (TMO - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #2.
Align Technology, Inc. (ALGN - Free Report) has an Earnings ESP of +2.06% with a Zacks Rank #3.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.33% and also carries a Zacks Rank of 3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Recall Issue Hurt Boston Scientific (BSX) Q3 Earnings?
Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2017 results before the opening bell on Oct 26.
Last quarter, the company delivered a positive earnings surprise of 3.23%. The trailing four-quarter average beat is pegged at 0.84%. Let’s see how things are shaping up prior to this announcement.
Key Catalysts
We are optimistic about the company’s gradually improving performance in Interventional Cardiology (IC), led by an innovative portfolio and robust commercial teams globally. The company while gaining share in a number of cardiovascular segments and DES (Drug Eluting Stent). continues to build momentum globally.
Boston Scientific Corporation Price and EPS Surprise
Boston Scientific Corporation price-eps-surprise | Boston Scientific Corporation Quote
However, ahead of earnings release, we believe the quarter’s IC business to be grossly impacted by the company’s product recall issue within Europe. Notably, last February, the company recalled one of its prime products, the Lotus range of heart devices from Europe due to device malfunctions. The company also delayed submission of its U.S. marketing application for its Lotus Edge device.
The above product line has little hope to return to the European and other markets before the fourth quarter. This might lead to a major setback for the company’s fast-growing transcatheter aortic valve replacement (TAVR) business within IC in the soon-to-be-reported quarter.
While we believe the downbeat IC business to earn some boost from the company’s recent $435-million acquisition of Switzerland-based Symetis SA, a full recovery may take time.
Accordingly, the Zacks Consensus Estimate for third-quarter IC revenues is currently pegged at $580 million, lower than the sequentially last quarter’s reported number of $603 million.
Other Factors at Play
Among the segments, MedSurg is expected to demonstrate a consistent performance, led by endoscopy. Urology and Women’s Health are also estimated to grow beyond market levels, driven by investment strategies in key international geographies.
The Zacks Consensus Estimate for third-quarter endoscopy revenues is pegged at $403 million, significantly higher than the year-ago quarter’s reported figure of $367 million. For Urology and Women’s Health, the current Zacks Consensus Estimate of $266 million remains ahead of the year-ago reported tally of $248 million.
On the flip side, severe currency headwinds that Boston Scientific has been facing of late, remain a concern. In fact, as the company records 47% of its sales from international markets, it remains highly exposed to currency fluctuations. In 2017, Boston Scientific expects an unfavorable foreign exchange challenge to the tune of $85 million on revenues and 700 bps or 8 cents per share on earnings.
Overall, Boston Scientific’s third-quarter 2017 adjusted earnings are expected in the band of 29-31 cents per share on revenues of $2.18-$2.21 billion.
Here’s what our quantitative model predicts:
Boston Scientific does not have the right combination of two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for increasing the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks ESP: Boston Scientific has an Earnings ESP of +0.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Boston Scientific carries a Zacks Rank #4 (Sell), which fails to increase the predictive power of ESP.
Stocks to Consider
Here are a few medical stocks worth considering with the right combination of elements to beat estimates this quarter:
Thermo Fisher Scientific (TMO - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #2.
Align Technology, Inc. (ALGN - Free Report) has an Earnings ESP of +2.06% with a Zacks Rank #3.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.33% and also carries a Zacks Rank of 3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>