We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Boston Scientific (BSX) Up 0.1% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Boston Scientific (BSX - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Boston Scientific due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Boston Scientific posted adjusted earnings per share (EPS) of 41 cents in the second quarter of 2018, up 28.1% from the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 34 cents. Further, adjusted EPS exceeded the company's guided range of 33-35 cents.
The company reported EPS of 40 cents in comparison with EPS of 11 cents in the year-ago quarter.
Revenues in Detail
Revenues in the second quarter were up 10.3% year over year on a reported basis and up 8.6% on operational basis (at constant exchange rate or CER) to $2.49 billion. Revenues exceeded the Zacks Consensus Estimate of $2.47 billion.
Organic revenue growth in the quarter (excluding the impact of changes in foreign currency exchange rates and sales from the acquisition of Symetis SA, excluding prior period related net sales) was 7.9% year over year.
Geographically, in the second quarter, the company achieved 7.9% operational growth in the United States (same organically), 9.6% in Europe, Middle East and Africa region (up 6.6%); 8.7% in the Asia Pacific region (same), 12.8% in Latin America and Canada (up 11.8%) and 21.1% in the emerging markets (up 20.6%).
Segment Analysis
Boston Scientific currently has three global reportable segments: Cardiovascular, Rhythm and Neuro and MedSurg. The company generates maximum revenues from Cardiovascular. Sales from its subsegments — Interventional Cardiology and Peripheral Interventions — were $662 million (up 5.1% year over year organically) and $304 million (up 8.7%), respectively, during the second quarter.
The second largest contributor to Boston Scientific's top line was the Rhythm and Neuro business, comprising Cardiac Rhythm Management (CRM), Electrophysiology and Neuromodulation. CRM reflected a 1.2% year-over-year increase in organic sales to $494 million in the reported quarter.
Electrophysiology sales went up 15.8% year over year organically to $79 million.
Neuromodulation sales rose 30.6% year over year organically to $202 million.
Other segments like Endoscopy and Urology and Pelvic Health (under the MedSurg broader group) recorded sales of $442 million (up 8.9% organically) and $308 million (up 9.1%), respectively.
Margins
Gross margin in the second quarter contracted 170 basis points (bps) year over year to 70.3% on 16.9% rise in cost of products sold. Adjusted operating margin contracted 130 bps to 23% in the reported quarter. During the quarter, selling, general and administrative expenses went up 8.7% to $886 million and research and development expenses rose 12.7% to $275 million. Royalty expenses remained flat at $17 million in the quarter.
Guidance Updated
Boston Scientific has provided an updated guidance for 2018. The company now projects current-year revenues in the range of $9.800-$9.880 billion compared to the previous range of $9.750-$9.900 billion. This represents an annualized growth of 8-9% on a reported basis and 6-7% on an organic basis (at CER and excluding contribution of approximately 40 bps from acquisitions). The Zacks Consensus Estimate for current-year revenues is pegged at $9.81 billion, within the guided range.
The company continues to expect adjusted EPS for 2018 in the band of $1.37-$1.41. The Zacks Consensus Estimate of $1.39 is within the guided band.
The company also provided its third-quarter 2018 financial outlook. Adjusted EPS is expected in the band of 33-35 cents on revenues of $2.380-$2.420 billion. The consensus mark for EPS stands at 34 cents while the same for revenues is at $2.39 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate.
VGM Scores
At this time, Boston Scientific has a poor Growth Score of F, however its momentum is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Boston Scientific has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Boston Scientific (BSX) Up 0.1% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Boston Scientific (BSX - Free Report) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Boston Scientific due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Recent Earnings
Boston Scientific posted adjusted earnings per share (EPS) of 41 cents in the second quarter of 2018, up 28.1% from the year-ago quarter. Earnings also surpassed the Zacks Consensus Estimate of 34 cents. Further, adjusted EPS exceeded the company's guided range of 33-35 cents.
The company reported EPS of 40 cents in comparison with EPS of 11 cents in the year-ago quarter.
Revenues in Detail
Revenues in the second quarter were up 10.3% year over year on a reported basis and up 8.6% on operational basis (at constant exchange rate or CER) to $2.49 billion. Revenues exceeded the Zacks Consensus Estimate of $2.47 billion.
Organic revenue growth in the quarter (excluding the impact of changes in foreign currency exchange rates and sales from the acquisition of Symetis SA, excluding prior period related net sales) was 7.9% year over year.
Geographically, in the second quarter, the company achieved 7.9% operational growth in the United States (same organically), 9.6% in Europe, Middle East and Africa region (up 6.6%); 8.7% in the Asia Pacific region (same), 12.8% in Latin America and Canada (up 11.8%) and 21.1% in the emerging markets (up 20.6%).
Segment Analysis
Boston Scientific currently has three global reportable segments: Cardiovascular, Rhythm and Neuro and MedSurg.
The company generates maximum revenues from Cardiovascular. Sales from its subsegments — Interventional Cardiology and Peripheral Interventions — were $662 million (up 5.1% year over year organically) and $304 million (up 8.7%), respectively, during the second quarter.
The second largest contributor to Boston Scientific's top line was the Rhythm and Neuro business, comprising Cardiac Rhythm Management (CRM), Electrophysiology and Neuromodulation. CRM reflected a 1.2% year-over-year increase in organic sales to $494 million in the reported quarter.
Electrophysiology sales went up 15.8% year over year organically to $79 million.
Neuromodulation sales rose 30.6% year over year organically to $202 million.
Other segments like Endoscopy and Urology and Pelvic Health (under the MedSurg broader group) recorded sales of $442 million (up 8.9% organically) and $308 million (up 9.1%), respectively.
Margins
Gross margin in the second quarter contracted 170 basis points (bps) year over year to 70.3% on 16.9% rise in cost of products sold. Adjusted operating margin contracted 130 bps to 23% in the reported quarter. During the quarter, selling, general and administrative expenses went up 8.7% to $886 million and research and development expenses rose 12.7% to $275 million. Royalty expenses remained flat at $17 million in the quarter.
Guidance Updated
Boston Scientific has provided an updated guidance for 2018. The company now projects current-year revenues in the range of $9.800-$9.880 billion compared to the previous range of $9.750-$9.900 billion. This represents an annualized growth of 8-9% on a reported basis and 6-7% on an organic basis (at CER and excluding contribution of approximately 40 bps from acquisitions). The Zacks Consensus Estimate for current-year revenues is pegged at $9.81 billion, within the guided range.
The company continues to expect adjusted EPS for 2018 in the band of $1.37-$1.41. The Zacks Consensus Estimate of $1.39 is within the guided band.
The company also provided its third-quarter 2018 financial outlook. Adjusted EPS is expected in the band of 33-35 cents on revenues of $2.380-$2.420 billion. The consensus mark for EPS stands at 34 cents while the same for revenues is at $2.39 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate.
VGM Scores
At this time, Boston Scientific has a poor Growth Score of F, however its momentum is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Boston Scientific has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.