April 24, 2019

Boston Scientific's Q1 earnings miss estimates as banned products impact profit

Photo | TMS Aerial Solutions
Boston Scientific's Marlborough headquarters

Shares of Marlborough medical device maker Boston Scientific opened Wednesday trading down 2% as the company's first quarter financials came in under expectations.

The company said its first quarter revenue of $2.5 billion rose 4% percent from the prior year period compared to the company's expectations of at least 6% growth.

Per-share earnings of $0.30 was under the company's guidance range low of $0.32 despite profit of $424 million representing a 42% increase from the first quarter of 2018 net income of $298 million.

That figure might have been higher if not for the U.S. Food & Drug Administration pulling two of the company's pelvic mesh products from the market due to safety and health concerns.

Boston Scientific said the removal of those products would result in a $25-million hit, but the company updated that full-year impact Wednesday to $30 million.

For the first quarter, that included a $5-million sales return reserve in the first quarter and an $18-million charge to net income.

In a statement, Chairman and CEO Mike Mahoney noted the revenue softness compared to company estimates, but noted the company's strong and growing portfolio.

"With our strong pipeline and category leadership strategy, we are confident in our top tier 2019 outlook and how we can help improve outcomes for patients around the world for years to come," Mahoney said.

The earnings report came the morning after the company won FDA approval for its much-anticipated Lotus Edge Aortic Valve System for patients with aortic stenosis, a heart valve disease that leads to narrowing of the aortic valve.

The device was specifically made for patients considered high risk for open heart surgery.

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