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Boston Scientific (BSX) Up 1.5% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Boston Scientific (BSX - Free Report) . Shares have added about 1.5% 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 its most recent earnings report in order to get a better handle on the important drivers.
Boston Scientific Q1 Earnings Beat Estimates, Gross Margin Dips
Boston Scientific posted adjusted earnings per share of 56 cents for the first quarter of 2024, up 19.1% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 9.8% and also exceeded the company’s adjusted earnings per share guidance range of 50-52 cents per share.
The quarter’s adjustments included certain amortization expenses, acquisition/divestitures-related net charges, and restructuring and restructuring-related charges, among others.
Reported earnings per share for the first quarter was 33 cents, reflecting a 57.1% improvement from the year-ago quarter figure.
First-quarter revenues of $3.86 billion improved 13.8% year over year on a reported basis and 15% on an operational basis (at a constant exchange rate or CER). Revenues grew 13.1% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 4.8%. The quarter’s top-line performance also exceeded the company’s projection of 7.5-9.5% growth on a reported basis (an increase of 7-9% organically).
Q1 Revenues in Detail
In the first quarter, revenues rose 12.7% in the United States on a reported basis (same operationally).
Revenues were up 12.7% in the Europe, Middle East and Africa (EMEA) region (up 13.3%) and 18.3% in the Asia Pacific zone (up 25.9%).
Revenues increased 17.9% in Latin America and Canada (up 12.7%).
Reported revenue growth in emerging markets was 22.6% (up 28.2% operationally).
Segmental Analysis
Boston Scientific recently reorganized its operational structure and aggregated its core businesses, each of which generates revenues from the sale of Medical Devices, into two reportable segments, MedSurg and Cardiovascular.
The company generates maximum revenues from Cardiovascular. Sales from its sub-segments Cardiology and Peripheral Interventions were $1.87 billion (up 17.9% year over year organically) and $573 million (up 11.3%), respectively, in the first quarter.
Within MedSurg, Endoscopy generated revenues of $6425 million, up 9.8% organically.
Urology revenues were $513 million, reflecting organic growth of 9.8%.
Neuromodulation within MedSurg reported $256 million in revenues, reflecting a 1.3% decline organically year over year.
Margins
Gross margin in the first quarter contracted 67 basis points (bps) year over year to 68.7%. There was a 16.3% rise in the cost of products sold to $1.21 billion in the reported quarter.
Selling, general and administrative expenses rose 12.3% to $1.36 billion. Research and development expenses rose 8.6% to $366 million. Royalty expenses of $10 million declined 9.1% year over year. Adjusted operating margin expanded 33 bps to 23.5% in the reported quarter.
2024 Guidance
Boston Scientific updated its full-year guidance and provided its second-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 11-13% on a reported basis (up from the earlier expectation of 8.5-9.5% growth) and approximately 10-12% on an organic basis (8-9% growth projected earlier). The Zacks Consensus Estimate is currently pegged at $15.55 billion, indicating a 9.2% rise from the 2023 reported figure. Full-year adjusted earnings per share is expected in the range of $2.29 to $2.34 ($2.23 to $2.27 estimated earlier). The Zacks Consensus Estimate is currently pegged at $2.25.
For the second quarter of 2024, revenue growth is projected in the range of approximately 10.5-12.5% on a reported basis (an increase of 10-12% organically). Adjusted earnings are expected in the range of 57-59 cents per share. The Zacks Consensus Estimate for second-quarter earnings and revenues is pegged at 56 cents per share and $3.93 billion, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Boston Scientific has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Boston Scientific has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Boston Scientific (BSX) Up 1.5% 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 1.5% 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 its most recent earnings report in order to get a better handle on the important drivers.
Boston Scientific Q1 Earnings Beat Estimates, Gross Margin Dips
Boston Scientific posted adjusted earnings per share of 56 cents for the first quarter of 2024, up 19.1% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 9.8% and also exceeded the company’s adjusted earnings per share guidance range of 50-52 cents per share.
The quarter’s adjustments included certain amortization expenses, acquisition/divestitures-related net charges, and restructuring and restructuring-related charges, among others.
Reported earnings per share for the first quarter was 33 cents, reflecting a 57.1% improvement from the year-ago quarter figure.
First-quarter revenues of $3.86 billion improved 13.8% year over year on a reported basis and 15% on an operational basis (at a constant exchange rate or CER). Revenues grew 13.1% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 4.8%. The quarter’s top-line performance also exceeded the company’s projection of 7.5-9.5% growth on a reported basis (an increase of 7-9% organically).
Q1 Revenues in Detail
In the first quarter, revenues rose 12.7% in the United States on a reported basis (same operationally).
Revenues were up 12.7% in the Europe, Middle East and Africa (EMEA) region (up 13.3%) and 18.3% in the Asia Pacific zone (up 25.9%).
Revenues increased 17.9% in Latin America and Canada (up 12.7%).
Reported revenue growth in emerging markets was 22.6% (up 28.2% operationally).
Segmental Analysis
Boston Scientific recently reorganized its operational structure and aggregated its core businesses, each of which generates revenues from the sale of Medical Devices, into two reportable segments, MedSurg and Cardiovascular.
The company generates maximum revenues from Cardiovascular. Sales from its sub-segments Cardiology and Peripheral Interventions were $1.87 billion (up 17.9% year over year organically) and $573 million (up 11.3%), respectively, in the first quarter.
Within MedSurg, Endoscopy generated revenues of $6425 million, up 9.8% organically.
Urology revenues were $513 million, reflecting organic growth of 9.8%.
Neuromodulation within MedSurg reported $256 million in revenues, reflecting a 1.3% decline organically year over year.
Margins
Gross margin in the first quarter contracted 67 basis points (bps) year over year to 68.7%. There was a 16.3% rise in the cost of products sold to $1.21 billion in the reported quarter.
Selling, general and administrative expenses rose 12.3% to $1.36 billion. Research and development expenses rose 8.6% to $366 million. Royalty expenses of $10 million declined 9.1% year over year. Adjusted operating margin expanded 33 bps to 23.5% in the reported quarter.
2024 Guidance
Boston Scientific updated its full-year guidance and provided its second-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 11-13% on a reported basis (up from the earlier expectation of 8.5-9.5% growth) and approximately 10-12% on an organic basis (8-9% growth projected earlier). The Zacks Consensus Estimate is currently pegged at $15.55 billion, indicating a 9.2% rise from the 2023 reported figure. Full-year adjusted earnings per share is expected in the range of $2.29 to $2.34 ($2.23 to $2.27 estimated earlier). The Zacks Consensus Estimate is currently pegged at $2.25.
For the second quarter of 2024, revenue growth is projected in the range of approximately 10.5-12.5% on a reported basis (an increase of 10-12% organically). Adjusted earnings are expected in the range of 57-59 cents per share. The Zacks Consensus Estimate for second-quarter earnings and revenues is pegged at 56 cents per share and $3.93 billion, respectively.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Boston Scientific has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, 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.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Boston Scientific has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.