Boston Scientific Sees 2009 EPS Above Street
29 Janvier 2009 - 4:46PM
Dow Jones News
Boston Scientific Corp. (BSX) projected adjusted 2009 earnings
per share well above Wall Street estimates, though its revenue
estimate brackets current expectations.
The medical device maker downplayed a $2.7 billion
fourth-quarter charge, noted that it continues to talk with the
Food and Drug Administration to resolve a 2006 warnings letter, and
asserted that involuntary stock sales by its co-founders are likely
over.
Shares of the company recently rose 78 cents, or 9%, to
$9.28.
Boston Scientific projected adjusted earnings for 2009 of 80
cents to 90 cents a share. Using Generally Accepted Accounting
Principals, the company expects earnings of 56 cents to 68 cents a
share.
Revenue for the year is expected to be $8 billion to $8.5
billion.
Wall Street analyst's currently expect the company to report
2009 earnings of 60 cents a share on revenue of $8.24 billion.
For the longer term, the company projects revenue growth of 5%
to 7% in 2010 and 2011, while adjusted earning per shares rise more
than 50% in the same period.
The guidance comes after Boston Scientific reported a
fourth-quarter loss late Wednesday of $2.43 billion, or $1.62 a
share.
The loss was weighed down by a $2.68 billion write-down of
goodwill related to its $28.4 billion acquisition of Guidant Corp.
in 2006.
In a conference call Thursday, Chief Executive Jim Tobin
downplayed the charge, saying that "taking a goodwill charge isn't
all that unusual these days."
The company explained that the impairment came from changes in
end-market demand relative to original assumptions about the deal
coupled with the recent disruption in the credit markets.
The charge has no impact on bank covenants or business
operations, the company said.
Tobin said the company is "pretty comfortable" with its cash
position and access to capital and remains capable of making deals.
But he warned that such activity could be slower than others may
expect as it has "raised the bar" on the sort of deals it is
willing to make.
"We aren't going to be doing as many deals as we historically
have, regardless of our cash position," said Tobin.
Boston Scientific's U.S. market share in the drug eluting stent
business rose 2 percentage points to 47% in the quarter, with the
remaining share going to Medtronic Inc. (MDT) with 10%, Johnson
& Johnson (JNJ) with 14%, and Abbott Laboratories (ABT) with
29%.
The company indicated that the market share was on the rise, to
49%, as the quarter ended with an almost 50/50 split between its
Promus stent and Taxus line.
Going forward, Tobin said that the company expects market share
in the stent business to remain in the high 40-percentage range to
"maybe a tad over" 50%.
Furthermore, Tobin said the company continues to work with the
Food and Drug Administration to resolve the final remaining issues
related to a January 2006 corporate warning level.
The letter, stemming from problems at company plants, set
restrictions on approving so-called "Class III" medical devices, or
the devices with the most stringent regulatory requirements,
The warning letter remains in effect, but restrictions are
peeling away as evidenced by recent FDA approvals for Boston
Scientific devices.
Tobin said that involuntary selling of stock by Boston
Scientific co-founders Peter Nicholas and John Abele "seems to have
stopped." He warned that it could start again, but "I don't think
anyone expects that it will."
In recent month, the co-founders flooded the market with
millions of shares, contributing to the company's flagging stock
price that was down 30% in the last 12 month, as of yesterday's
close.
-By Thomas Gryta; Dow Jones Newswires; 201-938-2053;
thomas.gryta@dowjones.com
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