Time New York: Fri 22 Feb 06:11 am  |  Save 15% on H&R Block Online


Boston Scientific (BSX) Q2 Earnings: Is a Beat in Store?


Boston Scientific Corporation BSX is scheduled to report second-quarter 2018 results before the opening bell on Jul 25.

In the last reported quarter, the company’s earnings per share beat the Zacks Consensus Estimate by 6.5%. Moreover, the company delivered positive earnings surprises in two of the trailing four quarters, the average beat being 2.4%.

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

Key Catalysts

Similar to the prior quarter, we are upbeat about solid contributions from Boston Scientific’s Cardiovascular business which comprises Interventional Cardiology (IC) and Peripheral Interventions (PI). In the last reported quarter, the company generated 39.2% of its total revenues from the highest revenue generating segment.

We are optimistic about the IC business that will help the company maintain impressive global growth, courtesy of an innovative portfolio and robust commercial teams. The division performed well in the last reported quarter, despite the LOTUS recall in Europe. Worldwide IC growth came on the back of strength in Structural Heart and complex PCI (percutaneouscoronary intervention) portfolio. However, the upside was partially offset by weak performance by the drug-eluting stents.

Boston Scientific Corporation Price and EPS Surprise

Within Structural Heart, we are looking forward to Boston Scientific’s WATCHMAN, ACURATE and IRIS product lines that are expected to contribute to the top line in the yet-to-be-reported quarter. The company expects revenues from WATCHMAN and ACURATE TAVR franchise to total approximately $400 million in 2018.

The WATCHMAN program depicted impressive performance in first-quarter 2018. The product has been used in more than 50,000 implants, worldwide. Moreover, the company expects continued growth in this platform on the back of increased utilization and geographical expansion.

Additionally, recent launches within the IC business like the WOLVERINE cutting balloon and the company’s next-generation rotational atherectomy platform — ROTAPRO — are expected to contribute significantly to the top line in the upcoming quarterly results.

The Zacks Consensus Estimate for IC revenues is pegged at $658 million, indicating an increase of 9.1% on a year-over-year basis. The company is expected to keep gaining strength in the business.

In the last reported quarter, the PI business performed impressively on the back of higher sales of Drug-Eluting Eluvia Stents and Ranger Balloon in Europe. Geographically, the company witnessed strength in Asia as well. Boston Scientific’s Atherectomy Jetstream platform also performed well in the first quarter of 2018.

The trend is expected to continue in the to-be-reported quarter. Accordingly, the Zacks Consensus Estimate for second-quarter PI revenues is pegged at $296 million, reflecting a rise of 8.4% year over year.

Overall, the Zacks Consensus Estimate for total revenues of $2.47 billion indicates an increase of 9.6% from the prior-year quarter’s tally. Also, the earnings estimates of 34 cents reflect a 6.3% rise on a year-over-year basis.

Other Factors at Play

Among the other segments, MedSurg is estimated to demonstrate a steady performance, led by endoscopy. Urology and Women’s Health are also projected to surpass market levels, driven by investment strategies in the key international geographies.

We are impressed with Boston Scientific’s recent acquisitions that have added several products (though many are under development) with immense potential. NxThera and nVision buyouts in Urology and Pelvic Health along with EmCision buyout in Endoscopy deserve a mention.

The company is gradually strengthening its presence in the emerging markets of Brazil, Russia, India and China (BRIC). In first-quarter 2018, business from the emerging markets registered a 17% growth. Business in China was once again remarkable (up 23% year over year). The company is currently looking forward to an improved performance ahead in China, following the recent approval of SYNERGY in this region.

Boston Scientific is gaining traction in India as well. It is currently targeting about 10 emerging markets for additional emphasis. The company is also optimistic about core cardiology segment which is gradually stabilizing with growth in the BRIC nations. This trend is expected to continue in the yet-to-be reported quarter’s results.

However, although immaterial for the to-be-reported quarter, the ongoing tensions between the United States and China regarding the imposition of tariffs on imports have raised concerns for major MedTech players as any adverse move might affect the top-line numbers in the upcoming quarters.

The company also provided second-quarter 2018 financial outlook. Adjusted EPS are expected in the range of 33-35 cents on revenues of $2.450-$2.500 billion.

Here’s What Our Quantitative Model Predicts

Per the proven Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Boston Scientific has a Zacks Rank #2, which increases the predictive power of ESP. It has an Earnings ESP of 2.44%, which makes surprise prediction easier. The combination suggests that the company is likely to beat earnings this quarter.

Other Stocks Worth a Look

Here are a few other medical stocks worth considering with the right combination of elements to beat estimates.

ResMed RMD has an Earnings ESP of +3.97% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stryker Corporation SYK has an Earnings ESP of +0.13% and a Zacks Rank #2.

Henry Schein, Inc. HSIC, a Zacks Ranked #3 company, has an Earnings ESP of +0.91%.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.