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Boston Scientific (BSX) Up 4.4% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Boston Scientific Corporation (BSX - Free Report) . Shares have added about 4.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 catalysts.
Recent Earnings
Boston Scientific posted adjusted earnings per share (EPS) (after considering certain one-time adjustments other than amortization expense) of $0.20 in the first quarter of 2017, up 5.3% from the year-ago quarter.
Considering amortized expense adjustments, the quarter’s adjusted EPS came in at $0.29, up 3.6% from the year-ago adjusted number. The figure, although remained in line with the lower-end of the company's adjusted EPS guidance range of $0.29–$0.31, missed the Zacks Consensus Estimate by $0.01.
Without these adjustments, the company reported earnings of $0.21 per share, up 40% year over year.
Revenues in Detail
Revenues in the first quarter were up 10% year over year on both reported and operational basis (at constant exchange rate or CER) to $2.16 billion. The figure topped the company’s guidance of $2.05–$2.10 billion and also exceeded the Zacks Consensus Estimate of $2.08 billion. Organic revenue growth in the first quarter (excluding the impact of changes in foreign currency exchange rates and sales from the acquisition of EndoChoice Holdings) was 9% year over year.
Geographically, in the first quarter, the company achieved growth of 13% in the U.S. (up 11% organically), 2% in Europe (up 7%) and 9% in the Asia, Middle East and Africa region (up 8% both operational basis and organically) and 12% in the emerging markets (same).
Segment Analysis
Boston Scientific currently has three global reportable segments: Cardiovascular, Rhythm Management and MedSurg.
The company generates maximum revenues from Cardiovascular. Sales from its sub segments, Interventional Cardiology and Peripheral Interventions were $590 million (up 8% year over year at CER) and $261 million (up 7%), respectively, during the first quarter.
The second largest contributor to Boston Scientific’s top line was Rhythm Management, which includes Cardiac Rhythm Management (CRM) and Electrophysiology. CRM reflected an 8% year-over-year increase in sales to $463 million at CER in the reported quarter.
Worldwide sales from pacemakers (within CRM) increased 21.3% to $148 million while defibrillators were marginally up 1.3% to $315 million. Electrophysiology sales went up 9% year over year at CER to $64 million.
Other segments like Endoscopy, Urology and Pelvic Health and Neuromodulation (under the MedSurg broader group) recorded sales of $379 million (up 14% at CER), $262 million (up 15%) and $141 million (up 17%), respectively.
Margins
Gross margin contracted 92 basis points (bps) year over year to 69.9% on 13.4% increase in cost of products sold. Adjusted operating margin also contracted 123 bps to 21.5% in the reported quarter. During the quarter, selling, general and administrative expenses went up 10.9% to $794 million while research and development expenses increased 11.9% to $235 million. Royalty expenses reduced 10.5% to $17 million.
Balance Sheet
Boston Scientific exited the first quarter with cash and cash equivalents of $156 million, down from $196 million at the end of 2016. At the end of the first quarter, the company had total long-term debt of $5.14 billion, a marginal reduction from $5.47 billion at the end of 2016.
Guidance
Boston Scientific has provided an update to its full-year 2017 guidance.
The company raised its 2017 revenue guidance to the range of $8.80–$8.90 billion (annualized growth of 5% to 6% on reported basis and growth of 6% to 7% on operational basis including contribution of approximately 70 bps from EndoChoice) from earlier band of $8.68–$8.88 billion (annualized growth of 3% to 6% on reported basis and growth of 5% to 7% on operational basis). The current Zacks Consensus Estimate for revenues is $8.78 billion, below the guided range.
Adjusted EPS guidance range for 2017, however, has been reiterated at $1.22−$1.26. The Zacks Consensus Estimate of $1.24 is within the guidance range.
The company also provided its second-quarter 2017 financial guidance. Adjusted earnings are expected in the band of $0.30–$0.32 per share on revenues of $2.19–$2.22 billion. The Zacks Consensus Estimate for EPS stands at $0.31 while for revenues it is $2.22 billion.
How have estimates been moving since then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Boston Scientific's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with a 'B'. Following a similar course, 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.
Zacks' style scores indicate that the company's stock is more suitable for momentum investors than value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Boston Scientific (BSX) Up 4.4% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Boston Scientific Corporation (BSX - Free Report) . Shares have added about 4.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 catalysts.
Recent Earnings
Boston Scientific posted adjusted earnings per share (EPS) (after considering certain one-time adjustments other than amortization expense) of $0.20 in the first quarter of 2017, up 5.3% from the year-ago quarter.
Considering amortized expense adjustments, the quarter’s adjusted EPS came in at $0.29, up 3.6% from the year-ago adjusted number. The figure, although remained in line with the lower-end of the company's adjusted EPS guidance range of $0.29–$0.31, missed the Zacks Consensus Estimate by $0.01.
Without these adjustments, the company reported earnings of $0.21 per share, up 40% year over year.
Revenues in Detail
Revenues in the first quarter were up 10% year over year on both reported and operational basis (at constant exchange rate or CER) to $2.16 billion. The figure topped the company’s guidance of $2.05–$2.10 billion and also exceeded the Zacks Consensus Estimate of $2.08 billion.
Organic revenue growth in the first quarter (excluding the impact of changes in foreign currency exchange rates and sales from the acquisition of EndoChoice Holdings) was 9% year over year.
Geographically, in the first quarter, the company achieved growth of 13% in the U.S. (up 11% organically), 2% in Europe (up 7%) and 9% in the Asia, Middle East and Africa region (up 8% both operational basis and organically) and 12% in the emerging markets (same).
Segment Analysis
Boston Scientific currently has three global reportable segments: Cardiovascular, Rhythm Management and MedSurg.
The company generates maximum revenues from Cardiovascular. Sales from its sub segments, Interventional Cardiology and Peripheral Interventions were $590 million (up 8% year over year at CER) and $261 million (up 7%), respectively, during the first quarter.
The second largest contributor to Boston Scientific’s top line was Rhythm Management, which includes Cardiac Rhythm Management (CRM) and Electrophysiology. CRM reflected an 8% year-over-year increase in sales to $463 million at CER in the reported quarter.
Worldwide sales from pacemakers (within CRM) increased 21.3% to $148 million while defibrillators were marginally up 1.3% to $315 million.
Electrophysiology sales went up 9% year over year at CER to $64 million.
Other segments like Endoscopy, Urology and Pelvic Health and Neuromodulation (under the MedSurg broader group) recorded sales of $379 million (up 14% at CER), $262 million (up 15%) and $141 million (up 17%), respectively.
Margins
Gross margin contracted 92 basis points (bps) year over year to 69.9% on 13.4% increase in cost of products sold. Adjusted operating margin also contracted 123 bps to 21.5% in the reported quarter. During the quarter, selling, general and administrative expenses went up 10.9% to $794 million while research and development expenses increased 11.9% to $235 million. Royalty expenses reduced 10.5% to $17 million.
Balance Sheet
Boston Scientific exited the first quarter with cash and cash equivalents of $156 million, down from $196 million at the end of 2016. At the end of the first quarter, the company had total long-term debt of $5.14 billion, a marginal reduction from $5.47 billion at the end of 2016.
Guidance
Boston Scientific has provided an update to its full-year 2017 guidance.
The company raised its 2017 revenue guidance to the range of $8.80–$8.90 billion (annualized growth of 5% to 6% on reported basis and growth of 6% to 7% on operational basis including contribution of approximately 70 bps from EndoChoice) from earlier band of $8.68–$8.88 billion (annualized growth of 3% to 6% on reported basis and growth of 5% to 7% on operational basis). The current Zacks Consensus Estimate for revenues is $8.78 billion, below the guided range.
Adjusted EPS guidance range for 2017, however, has been reiterated at $1.22−$1.26. The Zacks Consensus Estimate of $1.24 is within the guidance range.
The company also provided its second-quarter 2017 financial guidance. Adjusted earnings are expected in the band of $0.30–$0.32 per share on revenues of $2.19–$2.22 billion. The Zacks Consensus Estimate for EPS stands at $0.31 while for revenues it is $2.22 billion.
How have estimates been moving since then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Boston Scientific Corporation Price and Consensus
Boston Scientific Corporation Price and Consensus | Boston Scientific Corporation Quote
VGM Scores
At this time, Boston Scientific's stock has a subpar Growth Score of 'D', however its Momentum is doing a lot better with a 'B'. Following a similar course, 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.
Zacks' style scores indicate that the company's stock is more suitable for momentum investors than value investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.