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UPDATE: Boston Scientific stock drops 6% on Q4'19 misses


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UPDATE: Boston Scientific stock drops 6% on Q4'19 misses

After Boston Scientific Corp. released preliminary fourth quarter metrics that missed multiple estimates, Chairman and CEO Michael Mahoney said the misses were a surprise and the company nevertheless expects a strong 2020.

Mahoney said during a Jan. 14 presentation at the J.P. Morgan Healthcare Conference, one of the largest industry gatherings of the year underway in San Francisco, that Boston Scientific missed the midpoint of its guidance range by about $30 million.

The Marlborough, Mass.-based medical device maker's miss came primarily from its cardiac rhythm management and electrophysiology businesses, according to Mahoney.

Robbie Marcus, a senior coverage analyst with J.P. Morgan who moderated a Q&A with the CEO, said the cardiac rhythm management and electrophysiology businesses missed estimates for the fourth quarter by about $20 million and $7 million, respectively.

Boston Scientific's stock price fell by 6.17% to $42.67 at the close of markets on Jan. 14.

Mahoney remained confident that the company will have a strong 2020 and beyond, saying that people should expect "double-digit EPS growth."

The CEO touted the success of Boston Scientific's structural heart business, which he expects to hit the high end of the 2019 guidance range of between $700 million and $725 million. Mahoney added that the company plans to set 2020 revenue guidance for the business segment between $900 million to $1 billion.

Preliminary 4Q figures

Boston Scientific said its net sales for the fourth quarter of 2019 are expected to rise by 13.4% to $2.90 billion, compared to $2.56 billion in the same period a year ago, according to preliminary unaudited data.

The medical device maker had expected net sales to be in the guidance range of 13% to 15% for the fourth quarter of 2019.

For the full year 2019, the company's net sales are expected to grow 9.3% to about $10.74 billion, from about $9.82 billion in 2018.

Boston Scientific expects adjusted EPS to remain unaltered and is expected to be in the range of 42 cents to 45 cents for the fourth quarter. Adjusted EPS is also expected to remain in the previous estimate range of $1.55 to $1.58 for the full year.

The S&P Global Market Intelligence consensus normalized EPS estimates are 44 cents and $1.57 for the fourth quarter and full year, respectively.

On a GAAP basis, the company expects to exceed its previously issued EPS guidance range of 22 cents to 25 cents for the fourth quarter and 72 cents to 75 cents for the full year 2019.

The company said the expected increase is primarily due to a non-cash tax benefit arising from a transfer of an intellectual property, which was completed in the fourth quarter.