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What's in Store for Boston Scientific's (BSX) Q4 Earnings?

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Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2021 results on Feb 2, before the opening bell.

In the last reported quarter, the company’s earnings per share of 41 cents exceeded the Zacks Consensus Estimate by 2.5%. BSX’s bottom line beat estimates in three of the trailing four quarters and missed in one. The company has a trailing four-quarter earnings surprise of 2.03%, on average.

Factors at Play

Boston Scientific’s fourth-quarter top line is likely to have improved year over year with the gradual opening up of the economy in the United States and other regions across the globe. The company stated that given an improving scenario along with an innovative pipeline, expansion into faster growth markets, globalization efforts and enhanced digital capabilities, it is well-positioned to register strong results in the second half of 2021. These factors are likely to get reflected in the fourth-quarter performance as well.

The rate of growth is expected to have remained sloth compared with third-quarter 2020 levels, thanks to the emergence of the more contagious Omicron variant of COVID-19 in the fourth quarter. This scenario has once again started to defer non-COVID elective hospital admissions and procedures. For investors’ note, the Delta variant of COVID-19 impacted procedure volume globally throughout third-quarter 2021.

Boston Scientific Corporation Price and EPS Surprise

 

Boston Scientific Corporation Price and EPS Surprise

Boston Scientific Corporation price-eps-surprise | Boston Scientific Corporation Quote

 

On a geographic basis, every market of Boston Scientific is expected to have registered broad-based growth in the quarter under review from fourth-quarter 2020 levels, despite COVID-19 related uncertainties. The company is expected to have registered strong growth in EMEA within PI, EP, Endo and Neuromodulation divisions fueled by new product launches like TheraSphere, POLARx and AXIOS. In the Asia Pacific — particularly in China, Australia, and Korea — product launches are expected to have contributed to the company’s top line on the rise invaccination rates. Further, Ranger Drug-Coated Balloon and the newly-launched POLARx are likely to have contributed to growth in Japan.

Within the Interventional Cardiology (IC) business, the company is expected to have registered year-over-year growth in Structural Heart Valves, WATCHMAN and Complex PCI and Imaging franchises. The company is expected to report a sequential rise in WATCHMAN franchise revenues driven by the increasing hospital and physician utilization rates in the United States and Europe.

In TAVR, the ACURATE neo2 launch in Europe is expected to have registered positive performance. Sentinel, the company’s cerebral embolic protection device, exceeded 20% market share in the United States where it's utilized. This momentum is likely to have continued in the to-be-reported quarter.

However, the company had initiated a global, voluntary recall of all unused inventory of the LOTUS Edge Aortic Valve System. Although there will be no material charges related to LOTUS discontinuation in 2021, BSX will incur a loss of $62 million in LOTUS Edge sales this year. This is likely to be reflected in the fourth-quarter performance.

Within coronary therapies, drug-eluting stents continued to be a challenge from a pricing standpoint. Nevertheless, the company is expected to have witnessed strong growth in Complex PCI and Imaging, with strength in RotaPro and IVUS.

Within the Peripheral Interventions (PI) business, fourth-quarter sales are expected to be more resilient to the pandemic, banking on a favorable mix of high acuity and outpatient site of care for procedures as well as a category-leading portfolio and strong cadence of product launches. Interventional Oncology is expected to have gained from strong momentum in TheraSphere. In Venous, Varithena is expected to deliver solid fourth-quarter numbers and gain share in the varicose vein market.

Within Urology/ Pelvic Health, sales of Stone, Prostate Health and Pelvic Health franchises are expected to have recorded strong growth. The Lumenis acquisition (closed in September) is expected to have made a full-quarter contribution to the company’s sales. LithoVue, SpaceOAR and Rezum product lines are expected to have performed strongly. Boston Scientific continues to expect urology/ pelvic health to have one of the faster potential recovery curves, aided by a higher office ASE mix for most elective procedures.

Within Endoscopy, broad-based recovery across regions and growing strength in infection prevention are expected to have driven fourth-quarter revenues. New launches like AXIOS, Resolution Ultra hemostasis clip and single-use scopes are expected to have contributed to the company’s top line in the to-be-reported quarter. EXALT B, which is available in both the United Americas and Europe, is expected to have driven the company’s endoscopy sales.

Within Neuromodulation, the company is likely to have registered balanced procedure recovery across RF (radiofrequency), Vertiflex and Spinal Cord Stimulation on strong execution of category leadership strategy in pain. The ongoing launch of the next-gen WaveWriter Alpha SCS system with Cognita digital solutions and continued clinical evidence generation is expected to have boosted the top line.

Q4 Estimates

The Zacks Consensus Estimate for fourth-quarter total revenues is pegged at $3.10 billion, suggesting an improvement of 14.37% from the prior-year quarter’s reported number. The consensus mark for adjusted earnings is at 44 cents per share, calling for a 91.3% surge from the year-ago quarter’s reported figure.

What Our Quantitative Model Predicts

Per our proven model, a stock with the combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. However, this is not the case as you can see below.

Earnings ESP: Boston Scientific has an Earnings ESP of 0.00%. 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).

Stocks to Consider

Here are some medical stocks worth considering, as these have the right combination of elements to beat on earnings this time around

Cara Therapeutics (CARA - Free Report) has an Earnings ESP of +5.24% and a Zacks Rank of 1. Cara Therapeutics is slated to release fourth-quarter 2021 results on Feb 24.  

CARA’s earnings yield of 4.2% compares favorably with the industry’s 1.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Quest Diagnostics Incorporated (DGX - Free Report) has an Earnings ESP of +6.94% and a Zacks Rank of 2, at present. The company is slated to release fourth-quarter 2021 results on Feb 3.

Quest Diagnostics’ long-term historical earnings growth rate is 18.8%. DGX’s earnings yield of 11.21% compares favorably with the industry’s 6.32%.

Guardant Health (GH - Free Report) has an Earnings ESP of +9.45% and is a Zacks #2 Ranked stock.

The company is slated to release fourth-quarter 2021 results on Feb 23. Guardant Health’s long-term earnings growth rate is estimated at 10.8%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.