Yahoo Finance Boston Scientific (BSX) Q1 Earnings Beat Estimates, View Raised
Boston Scientific Corporation BSX posted adjusted earnings per share (EPS) of 56 cents for the first quarter of 2024, up 19.1% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 9.8% and also exceeded the company’s adjusted earnings per share guidance range of 50-52 cents per share.
The quarter’s adjustments included certain amortization expenses, acquisition/divestitures-related net charges, and restructuring and restructuring-related charges, among others.
Reported EPS for the first quarter was 33 cents, reflecting a 57.1% improvement from the year-ago quarter figure.
First-quarter revenues of $3.86 billion improved 13.8% year over year on a reported basis and 15% on an operational basis (at a constant exchange rate or CER). Revenues grew 13.1% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 4.8%. The quarter’s top-line performance also exceeded the company’s projection of 7.5-9.5% growth on a reported basis (an increase of 7-9% organically).
Q1 Revenues in Detail
In the first quarter, revenues rose 12.7% in the United States on a reported basis (same operationally).
Revenues were up 12.7% in the Europe, Middle East and Africa (EMEA) region (up 13.3%) and 18.3% in the Asia Pacific zone (up 25.9%).
Revenues increased 17.9% in Latin America and Canada (up 12.7%).
Reported revenue growth in emerging markets was 22.6% (up 28.2% operationally).
Boston Scientific Corporation Price, Consensus and EPS Surprise
Boston Scientific Corporation price-consensus-eps-surprise-chart | Boston Scientific Corporation Quote
Segmental Analysis
Boston Scientific recently reorganized its operational structure and aggregated its core businesses, each of which generates revenues from the sale of Medical Devices, into two reportable segments, MedSurg and Cardiovascular.
The company generates maximum revenues from Cardiovascular. Sales from its sub-segments Cardiology and Peripheral Interventions were $1.87 billion (up 17.9% year over year organically) and $573 million (up 11.3%), respectively, in the first quarter.
Within MedSurg, Endoscopy generated revenues of $6425 million, up 9.8% organically.
Urology revenues were $513 million, reflecting organic growth of 9.8%.
Neuromodulation within MedSurg reported $256 million in revenues, reflecting a 1.3% decline organically year over year.
Margins
Gross margin in the first quarter contracted 67 basis points (bps) year over year to 68.7%. There was a 16.3% rise in the cost of products sold to $1.21 billion in the reported quarter.
Selling, general and administrative expenses rose 12.3% to $1.36 billion. Research and development expenses rose 8.6% to $366 million. Royalty expenses of $10 million declined 9.1% year over year. Adjusted operating margin expanded 33 bps to 23.5% in the reported quarter.
2024 Guidance
Boston Scientific updated its full-year guidance and provided its second-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 11-13% on a reported basis (up from the earlier expectation of 8.5-9.5% growth) and approximately 10-12% on an organic basis (8-9% growth projected earlier). The Zacks Consensus Estimate is currently pegged at $15.55 billion, indicating a 9.2% rise from the 2023 reported figure. Full-year adjusted EPS is expected in the range of $2.29 to $2.34 ($2.23 to $2.27 estimated earlier). The Zacks Consensus Estimate is currently pegged at $2.25.
For the second quarter of 2024, revenue growth is projected in the range of approximately 10.5-12.5% on a reported basis (an increase of 10-12% organically). Adjusted earnings are expected in the range of 57-59 cents per share. The Zacks Consensus Estimate for second-quarter earnings and revenues is pegged at 56 cents per share and $3.93 billion, respectively.
Our Take
Boston Scientific's first-quarter 2024 adjusted earnings and revenues exceeded the respective Zacks Consensus Estimate. The company registered a strong year-over-year improvement in organic sales, indicating a solid rebound in the legacy businesses across all geographic regions despite all macroeconomic odds.
Barring Neuromodulation, organic and operational revenues at its core business segments were up in the reported quarter. An optimistic 2024 and second-quarter guidance is expected to increase investors’ confidence in the stock.
However, mounting costs put pressure on the company’s gross margin.
Zacks Rank and Key Picks
Boston Scientific currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are Inspire Medical Systems INSP, Insulet PODD and Exact Sciences EXAS.
Inspire Medical Systems, sporting a Zacks Rank #1 (Strong Buy), has an estimated earnings growth rate of 51.4% for 2024 compared with the industry’s 19.4%.
INSP’s earnings surpassed estimates in each of the trailing four quarters, the average being 353.6%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Insulet, carrying a Zacks Rank #2 (Buy), has an estimated long-term earnings growth rate of 18.1% compared with the industry’s 11.4%.
PODD surpassed earnings estimates in each of the trailing four quarters, the average being 100.1%.
Exact Sciences, carrying a Zacks Rank #2, has an estimated earnings growth rate of 23.9% for 2024 compared with the industry’s 13% growth.
EXAS’ earnings surpassed estimates in each of the trailing four quarters, the average surprise being 51.5%.
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