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Can Overall Growth Boost Boston Scientific (BSX) Q3 Earnings?

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Boston Scientific Corporation (BSX - Free Report) is scheduled to report third-quarter 2019 results on Oct 23, before the opening bell.

In the last reported quarter, the company’s earnings per share exceeded the Zacks Consensus Estimate by 2.63%. Meanwhile, it delivered a positive earnings surprise in three of the trailing four quarters, the average beat being 2.05%.

Let’s see how things are shaping up prior to this announcement.

Key Catalysts

We are upbeat about solid contributions from Boston Scientific’s Cardiovascular business group, which comprises Interventional Cardiology (IC) and Peripheral Interventions (PI).

Interventional Cardiology

We are once again optimistic about the IC business, which is likely to have helped the company maintain an impressive global growth momentum in the third quarter as well, courtesy of an innovative portfolio and robust commercial teams. Complex PCI (percutaneous coronary intervention) products within IC are gaining solid traction from successful global expansion efforts.

Within IC, the company is demonstrating consistent strength in structural heart with WATCHMAN, ACURATE, SENTINEL, and complex PCI and PCI guidance portfolios. In the last reported quarter, WATCHMAN sales growth was ahead of expectation on huge customer adoption. In Europe, WATCHMAN FLX’s transition from limited market release to full launch also boosted growthBoth trends most likely continued in the third quarter riding on the rising uptake and expanding international footprint of the device.

The ACURATE TAVR valve platform has emerged as the fastest developing valve in Europe and registered nearly 30% growth in the last reported quarter. We expect this upside to contribute to the company’s top line in the upcoming quarterly results.

In the second quarter, the SENTINEL Cerebral embolic protection device’s rollout went extremely well, leading to strong growth rates as supply scales up. We expect this momentum to have continued in the third quarter too.

Further, the company’s controlled commercial launch of LOTUS Edge in Europe is running well and is also expected to get reflected through the upcoming quarterly results.

The Zacks Consensus Estimate for IC revenues is pegged at $682 million, indicating an increase of 10.9% from the year-ago reported figure.

Peripheral Interventions

In recent quarters, the PI business steadily demonstrated a solid uptrend across segments like peripheral arterial disease, venous and interventional oncology. In the last reported quarter, the launches of Vici Venous Stent in the United States and Eluvia DES in Japan led to growth besides a robust regional progress in Interventional Oncology, particularly in Asia.

We anticipate this trend to have most likely continued in the to-be-reported quarter.

Per Boston Scientific, Eluvia has a substantial market potential owing to the large addressable patient population; a differentiated, sustained-release technology; and the superior clinical outcomes with reduced need for reintervention. We believe, this product has once again contributed to the company’s third-quarter results.

Further, with the completion of BTG acquisition (in August), the consolidated entity is expected to have been significantly accretive the top line in the third quarter. In this regard, BTG has three primary businesses, of which Interventional Medicine portfolio including various PI product lines is the largest.

However, Eluvia might have witnessed slower adoption rate in the United States and Europe during the third quarter due to ongoing Paclitaxel concerns. Although in June’s FDA Advisory Committee panel meeting, the company presented updated clinical data affirming the safety of Paclitaxel and the Eluvia stent, any chance of immediate recovery seems bleak.

The Zacks Consensus Estimate for third-quarter PI revenues stands at $338 million, suggesting a 30.7% surge from the prior-year reported figure.

Other Factors at Play

Among the other segments, MedSurg is expected to report stable numbers in third–quarter release, led by growth within endoscopy. This is likely to have been fueled by a series of product launches in recent times including SpyGlass DS II, Jagwire and ORISE Gel.

Urology and Pelvic Health segment is also expected to have registered sturdy growth in the third quarter, driven by a likely uptick in Stone franchise with strong LithoVue single-use ureteroscope sales and a solid uptrend in the  emerging markets.

The company earlier expected higher acceleration in UroPH sales during the second half of the year from consistent strength in LithoVue and SpaceOAR, the one-year anniversaries of the acquisitions of NxThera (in May) and Augmenix (in October) plus product unveiling of the Tactra implant in Men's Health. All these should get reflected in third-quarter numbers.

Within neuromodulation, in the last reported quarter, the company registered robust sales growth in Brain business, boosted by a solid Vercise DBS Systems’ uptake. However, the same was partially offset by weaker spinal cord stimulation results. This trend is likely to have persisted in the to-be-reported quarter too.

Which Way Are Estimates Trending?

The Zacks Consensus Estimate for total revenues of $2.64 billion suggests growth of 10.5% from the prior-year reported number. Also, the consensus mark for earnings of 38 cents per share indicates an 8.6% rise from the year-ago reported figure.

What Our Quantitative Model Predicts

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. This is not the case here as you will 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 #3. 

Stocks Worth a Look

Here are a few medical stocks worth considering with the right combination of elements to beat on earnings this reporting cycle.

ViewRay, Inc. (VRAY - Free Report) has a Zacks Rank #2 and an Earnings ESP of +17.36%. You can see the complete list of today’s Zacks #1 Rank stocks here.

DENTSPLY SIRONA (XRAY - Free Report) has a Zacks Rank of 3 and an Earnings ESP of +5.05%.

Aurora Cannabis Inc. (ACB - Free Report) is Zacks #3 Ranked and an Earnings ESP of +22.22%.

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