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BSX Q3 Results Reset Growth Expectations as 2027 Outlook Stays Weak
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Key Takeaways
Boston Scientific's Q3 organic sales growth of 1.5% missed guidance after a cybersecurity disruption.
Boston Scientific's adjusted EPS fell 3% to 73 cents, while 2026 sales and earnings forecasts were cut.
BSX management expects 2027 to mark the cycle's trough, with recovery in 2028 driven by new launches.
Boston Scientific Corp. (BSX - Free Report) reported third-quarter 2026 organic sales growth of 1.5%, below its prior 3%-5% guidance, as an August cybersecurity incident disrupted manufacturing and shipments.
The weaker quarter also pressured margins and earnings. Management cut its full-year outlook and expects 2027 to be the trough of the current cycle, shifting attention toward whether new products and restructuring can support a recovery in 2028.
BSX Q3 Sales Growth Falls Short of Guidance
Third-quarter revenues rose 1.5% year over year to $5.14 billion on a reported, operational and organic basis. The cybersecurity incident reduced organic sales growth by approximately 300 basis points after an eight-business-day disruption to Boston Scientific’s global network.
The shortfall was not broad-based across every business. Neuromodulation sales increased 13%, while Interventional Cardiology grew 19%. Still, Electrophysiology sales declined 5% and WATCHMAN sales fell 6%, leaving two previously important growth engines under pressure.
Boston Scientific Margins Absorb a Major Hit
Adjusted gross margin fell 300 basis points (bps) year over year to 68%, primarily because of unfavorable manufacturing absorption during the cyber-related disruption. Adjusted operating margin contracted 150 basis points (bps) to 26.5%.
Adjusted earnings were 73 cents per share, down 3% year over year and below management’s prior 80-82 cents guidance. Boston Scientific estimated that the cyber incident reduced adjusted earnings by 7 cents per share through lower sales and added manufacturing and operating costs.
BSX Cuts Its Full-Year Growth and EPS Outlook
Boston Scientific now expects full-year 2026 organic sales growth of approximately 3.75%, down from its previous 5%-6% range. Adjusted earnings guidance was reduced to $3.16-$3.18 per share from $3.28-$3.32.
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The fourth-quarter setup remains weak. Management expects reported and organic sales to decline 1%-3%, with adjusted earnings of 77-79 cents per share. The company expects another 200-300 basis points (bps) of cyber-related pressure as customer inventory replenishment affects quarterly comparisons.
Boston Scientific Pushes Recovery Further Out
Management expects 2027 to be the trough in the cycle and said sales and adjusted earnings growth will be challenging next year, excluding the pending Penumbra acquisition. Electrophysiology share erosion is expected to continue until FARAWAVE Ultra, now targeted for early 2028, reaches the market.
Competitive pressure remains active. Abbott Laboratories (ABT - Free Report) said its third-quarter Electrophysiology sales rose 15.5% on a comparable basis as the Volt pulsed field ablation system contributed to growth. Johnson & Johnson (JNJ - Free Report) has also advanced its VARIPULSE Pro platform in Europe and is studying the technology against FARAPULSE in persistent atrial fibrillation.
BSX Ratings Reflect the Post-Earnings Reset
The near-term picture remains constrained by weaker guidance, WATCHMAN softness, electrophysiology share pressure and China pricing headwinds. Boston Scientific expects meaningful improvement in revenue and adjusted earnings performance in 2028, supported by new launches and organizational actions. Management also expects the rest of the business to remain an important source of support while its two pressured franchises work through the transition.
BSX currently carries a Zacks Rank #5 (Strong Sell). Its Momentum Score of B is the strongest of the Style Scores, while the Value Score of C, Growth Score of C and VGM Score of C point to a more mixed profile. Because Style Scores complement the Zacks Rank rather than replace it, the combination suggests that favorable momentum characteristics do not offset the weaker earnings-revision backdrop reflected in the current rank.
View the Zacks #1 Rank List
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BSX Q3 Results Reset Growth Expectations as 2027 Outlook Stays Weak
Key Takeaways
Boston Scientific Corp. (BSX - Free Report) reported third-quarter 2026 organic sales growth of 1.5%, below its prior 3%-5% guidance, as an August cybersecurity incident disrupted manufacturing and shipments.
The weaker quarter also pressured margins and earnings. Management cut its full-year outlook and expects 2027 to be the trough of the current cycle, shifting attention toward whether new products and restructuring can support a recovery in 2028.
BSX Q3 Sales Growth Falls Short of Guidance
Third-quarter revenues rose 1.5% year over year to $5.14 billion on a reported, operational and organic basis. The cybersecurity incident reduced organic sales growth by approximately 300 basis points after an eight-business-day disruption to Boston Scientific’s global network.
The shortfall was not broad-based across every business. Neuromodulation sales increased 13%, while Interventional Cardiology grew 19%. Still, Electrophysiology sales declined 5% and WATCHMAN sales fell 6%, leaving two previously important growth engines under pressure.
Boston Scientific Margins Absorb a Major Hit
Adjusted gross margin fell 300 basis points (bps) year over year to 68%, primarily because of unfavorable manufacturing absorption during the cyber-related disruption. Adjusted operating margin contracted 150 basis points (bps) to 26.5%.
Adjusted earnings were 73 cents per share, down 3% year over year and below management’s prior 80-82 cents guidance. Boston Scientific estimated that the cyber incident reduced adjusted earnings by 7 cents per share through lower sales and added manufacturing and operating costs.
BSX Cuts Its Full-Year Growth and EPS Outlook
Boston Scientific now expects full-year 2026 organic sales growth of approximately 3.75%, down from its previous 5%-6% range. Adjusted earnings guidance was reduced to $3.16-$3.18 per share from $3.28-$3.32.
Image Source: Zacks Investment Research
The fourth-quarter setup remains weak. Management expects reported and organic sales to decline 1%-3%, with adjusted earnings of 77-79 cents per share. The company expects another 200-300 basis points (bps) of cyber-related pressure as customer inventory replenishment affects quarterly comparisons.
Boston Scientific Pushes Recovery Further Out
Management expects 2027 to be the trough in the cycle and said sales and adjusted earnings growth will be challenging next year, excluding the pending Penumbra acquisition. Electrophysiology share erosion is expected to continue until FARAWAVE Ultra, now targeted for early 2028, reaches the market.
Competitive pressure remains active. Abbott Laboratories (ABT - Free Report) said its third-quarter Electrophysiology sales rose 15.5% on a comparable basis as the Volt pulsed field ablation system contributed to growth. Johnson & Johnson (JNJ - Free Report) has also advanced its VARIPULSE Pro platform in Europe and is studying the technology against FARAPULSE in persistent atrial fibrillation.
BSX Ratings Reflect the Post-Earnings Reset
The near-term picture remains constrained by weaker guidance, WATCHMAN softness, electrophysiology share pressure and China pricing headwinds. Boston Scientific expects meaningful improvement in revenue and adjusted earnings performance in 2028, supported by new launches and organizational actions. Management also expects the rest of the business to remain an important source of support while its two pressured franchises work through the transition.
BSX currently carries a Zacks Rank #5 (Strong Sell). Its Momentum Score of B is the strongest of the Style Scores, while the Value Score of C, Growth Score of C and VGM Score of C point to a more mixed profile. Because Style Scores complement the Zacks Rank rather than replace it, the combination suggests that favorable momentum characteristics do not offset the weaker earnings-revision backdrop reflected in the current rank.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.