Boston Scientific Loss Narrows; Reveals Job Cuts - Update

(RTTNews) - Medical devices maker Boston Scientific Corp. (BSX), Thursday reported a third-quarter loss that narrowed from last year, helped by lower expenses notwithstanding some flat revenue. Revenue for the quarter was hampered by lower sales at its Cardiovascular segment, even as MedSurg business grew. Both earnings and revenue for the quarter topped Wall Street estimates.

Looking ahead to 2013, the company expects net loss to be wider than estimated, but raised the lower end of its adjusted earnings guidance and tightened its sales expectations.

The company said it will cut 1,100 to 1,500 positions worldwide as part of its 2014 restructuring program to drive operational efficiencies.

Boston Scientific also said its Chief Financial Officer Jeffrey Capello will resign at the end of December and will be replaced by Daniel Brennan, currently the company's senior vice president and corporate controller. Brennan joined Boston Scientific in 1996.

The Natick, Massachusetts-based company posted a third-quarter net loss of $5 million or breakeven per share, compared with a net loss of $664 million or $0.48 per share last year.

Results for the recent quarter included acquisition, restructuring and other charges of $235 million, while the prior year recorded goodwill and other charges of $885 million.

Excluding items, adjusted earnings for the quarter were $230 million or $0.17 per share, compared with $221 million or $0.16 per share a year ago.

On average, 20 analysts polled by Thomson Reuters expected earnings of $0.09 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the third quarter were $1.735 billion, flat with last year. Analysts expected revenue of $1.73 billion for the quarter.

Segment-wise, MedSurg sales climbed 9 percent year-over-year, while Cardiovascular sales declined 2 percent and Rhythm Management sales were flat.

For the fourth quarter, the company estimates net earnings of $0.04 to $0.08 per share, adjusted earnings of $0.18 to $0.20 per share and sales of $1.78 billion to $1.83 billion. Analysts currently expect earnings of $0.13 per share on revenue of $1.83 billion for the quarter.

For fiscal 2013, the company now estimates net loss of $0.13 to $0.09 per share, adjusted earnings of $0.69 to $0.71 per share and sales of $7.085 billion to $7.135 billion. Analysts currently expect earnings of $0.44 per share on revenue of $7.14 billion for the year.

The company earlier estimated net loss of $0.01 to $0.07 per share, adjusted earnings of $0.67 to $0.71 per share and sales of $7.05 billion to $7.17 billion for 2013.

Meanwhile, Boston Scientific estimates its 2014 restructuring program to reduce annual pre-tax operating expenses by about $150 million to $200 million exiting 2015. Program implementation is expected to result in pre-tax charges of about $175 million to $225 million.

Program activities are expected to be initiated in the fourth quarter of 2013 and are expected to be mostly completed by the end of 2015.

Boston Scientific is trading at $11.57, down $0.72 or 5.86%, on a volume of 30 million shares on the NYSE. In the past 52 weeks, the share traded in the range of $5.04 - $12.48.