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Will Boston Scientific's (BSX) Q3 Earnings Reflect Overall Gain?
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Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2018 results before the opening bell on Oct 24.
In the last reported quarter, the company’s earnings per share beat the Zacks Consensus Estimate by 20.6%. Moreover, the company delivered positive earnings surprises in two of the trailing four quarters, the average beat being 6.8%.
Let’s see, how things are shaping up prior to this announcement.
Key Catalysts
Similar to the prior quarter, we are upbeat about strong contributions from Boston Scientific’s Cardiovascular business group, which comprises Interventional Cardiology (IC) and Peripheral Interventions (PI). In the last reported quarter, the company generated around 39% of its total revenues from this highest revenue generating segment.
We are optimistic about the IC business that will help the company maintain impressive global growth, courtesy of an innovative portfolio and robust commercial teams. Despite the LOTUS valve recall related setback in Europe, the division performed well in the last reported quarter, demonstrating its ongoing diversification strategy.
Worldwide IC growth was generated on the back of strength in Structural Heart and complex PCI (percutaneouscoronary intervention) portfolio. However, the upside was partially offset by weak performance of the drug-eluting stents.
Within Structural Heart, we are looking forward to Boston Scientific’s WATCHMAN, ACURATE and IRIS product lines that are expected to contribute to the top line in the to-be-reported quarter. The company expects revenues from WATCHMAN and ACURATE TAVR franchise to total approximately $450 million in 2018.
This apart, the recent acquisition of Claret Medical should also largely contribute to Structural Heart’s top line. Notably, Claret Medical brought Sentinel (the only cerebral embolic protection system approved in the U.S. and Europe) to Boston Scientific’s Structural Heart portfolio.
The WATCHMAN program depicted impressive performance in second-quarter 2018. According to Boston Scientific, all key metrics are trending well, including utilization, reorder rates and account opening. Moreover, the company expects continued growth in this platform on the back of increased utilization and geographical expansion.
The Zacks Consensus Estimate for IC revenues is pegged at $630 million, indicating an increase of 6.9% on a year-over-year basis. The company is expected to continue gaining strength in the business.
In recent quarters, the PI business has consistently demonstrated strong growth across segments likeperipheral arterial disease, venous, and interventional oncology. In the last-reported quarter, in Europe, the company demonstrated excellent uptake of its drug-eluting technologies, the Ranger drug-coated balloon, the Eluvia drug-Eluting stent, and the Jetstream atherectomy system. Also, the company is witnessing strong growth in Asia.
The trend is expected to continue in the to-be-reported quarter. Accordingly, the Zacks Consensus Estimate for second-quarter PI revenues is pegged at $290 million, reflecting a rise of 8.2% year over year.
Other Factors at Play
Among the other segments, MedSurg is estimated to demonstrate a steady performance led by endoscopy. Urology and Pelvic Health are also projected to surpass market levels, driven by investment strategies in the key international geographies.
Within endoscopy, the company is expected to demonstrated strong results led by promising EndoChoice performance, particularly in pathology and infection prevention. Urology and Pelvic Health business should also continue to maintain its growth momentum on strong global performance.
Boston Scientific’s recent acquisitions have added several products (though many are under development) with immense potential to its portfolio. NxThera and nVision buyouts in Urology and Pelvic Health along with EmCision buyout in Endoscopy deserve special mention.
The company is gradually strengthening its presence in the emerging markets of Brazil, Russia, India and China (BRIC). In second-quarter 2018, business from the emerging markets registered 21% growth, led by excellent growth in China.The company is currently looking forward to an improved performance ahead in China, following the approval of SYNERGY in this region.
Boston Scientific Corporation Price and EPS Surprise
Boston Scientific is gaining traction in India as well. It is currently targeting about 10 emerging markets for additional emphasis. The company is also optimistic about its core cardiology segment, which is gradually stabilizing with growth in the BRIC nations. This trend is expected to continue in the to-be reported quarter.
However, the ongoing tensions between the United States and China regarding the imposition of tariffs on imports have raised concerns for major MedTech players, as any adverse move might affect top-line numbers in the coming quarters.
Overall, the Zacks Consensus Estimate for total revenues of $2.41 billion indicates an increase of 8.3% from the prior-year quarter. Also, the earnings estimates of 34 cents reflect a 9.7% rise on a year-over-year basis.
Now, let us look at the company-provided third-quarter 2018 financial outlook. Adjusted EPS is expected to be 33-35 cents on revenues of $2.380-$2.420 billion.
Here’s What Our Quantitative Model Predicts
Per the proven Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Boston Scientific has a Zacks Rank #2, which increases the predictive power of ESP. It has an Earnings ESP of +1.23%, which makes surprise prediction easier. The combination suggests that the company is likely to beat earnings this quarter.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering with the right combination of elements to beat estimates.
DaVita Inc. (DVA - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2.
Masimo Corp. (MASI - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of 2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Image: Bigstock
Will Boston Scientific's (BSX) Q3 Earnings Reflect Overall Gain?
Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2018 results before the opening bell on Oct 24.
In the last reported quarter, the company’s earnings per share beat the Zacks Consensus Estimate by 20.6%. Moreover, the company delivered positive earnings surprises in two of the trailing four quarters, the average beat being 6.8%.
Let’s see, how things are shaping up prior to this announcement.
Key Catalysts
Similar to the prior quarter, we are upbeat about strong contributions from Boston Scientific’s Cardiovascular business group, which comprises Interventional Cardiology (IC) and Peripheral Interventions (PI). In the last reported quarter, the company generated around 39% of its total revenues from this highest revenue generating segment.
We are optimistic about the IC business that will help the company maintain impressive global growth, courtesy of an innovative portfolio and robust commercial teams. Despite the LOTUS valve recall related setback in Europe, the division performed well in the last reported quarter, demonstrating its ongoing diversification strategy.
Worldwide IC growth was generated on the back of strength in Structural Heart and complex PCI (percutaneouscoronary intervention) portfolio. However, the upside was partially offset by weak performance of the drug-eluting stents.
Within Structural Heart, we are looking forward to Boston Scientific’s WATCHMAN, ACURATE and IRIS product lines that are expected to contribute to the top line in the to-be-reported quarter. The company expects revenues from WATCHMAN and ACURATE TAVR franchise to total approximately $450 million in 2018.
This apart, the recent acquisition of Claret Medical should also largely contribute to Structural Heart’s top line. Notably, Claret Medical brought Sentinel (the only cerebral embolic protection system approved in the U.S. and Europe) to Boston Scientific’s Structural Heart portfolio.
The WATCHMAN program depicted impressive performance in second-quarter 2018. According to Boston Scientific, all key metrics are trending well, including utilization, reorder rates and account opening. Moreover, the company expects continued growth in this platform on the back of increased utilization and geographical expansion.
The Zacks Consensus Estimate for IC revenues is pegged at $630 million, indicating an increase of 6.9% on a year-over-year basis. The company is expected to continue gaining strength in the business.
In recent quarters, the PI business has consistently demonstrated strong growth across segments likeperipheral arterial disease, venous, and interventional oncology. In the last-reported quarter, in Europe, the company demonstrated excellent uptake of its drug-eluting technologies, the Ranger drug-coated balloon, the Eluvia drug-Eluting stent, and the Jetstream atherectomy system. Also, the company is witnessing strong growth in Asia.
The trend is expected to continue in the to-be-reported quarter. Accordingly, the Zacks Consensus Estimate for second-quarter PI revenues is pegged at $290 million, reflecting a rise of 8.2% year over year.
Other Factors at Play
Among the other segments, MedSurg is estimated to demonstrate a steady performance led by endoscopy. Urology and Pelvic Health are also projected to surpass market levels, driven by investment strategies in the key international geographies.
Within endoscopy, the company is expected to demonstrated strong results led by promising EndoChoice performance, particularly in pathology and infection prevention. Urology and Pelvic Health business should also continue to maintain its growth momentum on strong global performance.
Boston Scientific’s recent acquisitions have added several products (though many are under development) with immense potential to its portfolio. NxThera and nVision buyouts in Urology and Pelvic Health along with EmCision buyout in Endoscopy deserve special mention.
The company is gradually strengthening its presence in the emerging markets of Brazil, Russia, India and China (BRIC). In second-quarter 2018, business from the emerging markets registered 21% growth, led by excellent growth in China.The company is currently looking forward to an improved performance ahead in China, following the approval of SYNERGY in this region.
Boston Scientific Corporation Price and EPS Surprise
Boston Scientific Corporation Price and EPS Surprise | Boston Scientific Corporation Quote
Boston Scientific is gaining traction in India as well. It is currently targeting about 10 emerging markets for additional emphasis. The company is also optimistic about its core cardiology segment, which is gradually stabilizing with growth in the BRIC nations. This trend is expected to continue in the to-be reported quarter.
However, the ongoing tensions between the United States and China regarding the imposition of tariffs on imports have raised concerns for major MedTech players, as any adverse move might affect top-line numbers in the coming quarters.
Overall, the Zacks Consensus Estimate for total revenues of $2.41 billion indicates an increase of 8.3% from the prior-year quarter. Also, the earnings estimates of 34 cents reflect a 9.7% rise on a year-over-year basis.
Now, let us look at the company-provided third-quarter 2018 financial outlook. Adjusted EPS is expected to be 33-35 cents on revenues of $2.380-$2.420 billion.
Here’s What Our Quantitative Model Predicts
Per the proven Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Boston Scientific has a Zacks Rank #2, which increases the predictive power of ESP. It has an Earnings ESP of +1.23%, which makes surprise prediction easier. The combination suggests that the company is likely to beat earnings this quarter.
Other Stocks Worth a Look
Here are a few other medical stocks worth considering with the right combination of elements to beat estimates.
Henry Schein, Inc. (HSIC - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
DaVita Inc. (DVA - Free Report) has an Earnings ESP of +2.41% and a Zacks Rank #2.
Masimo Corp. (MASI - Free Report) has an Earnings ESP of +0.98% and a Zacks Rank of 2.
5 Medical Stocks to Buy Now
Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia and other conditions.
New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.
Click here to see the 5 stocks >>