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Boston Scientific (BSX) Q4 Earnings Top, Operating Margin Falls
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Boston Scientific Corporation (BSX - Free Report) posted adjusted earnings per share (EPS) of 55 cents for the fourth quarter of 2023, up 22.2% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 7.8% and also exceeded the company’s adjusted earnings per share guidance range of 49-52 cents.
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 fourth quarter was 34 cents, reflecting a significant improvement from the year-ago quarter figure of 9 cents.
Full-year adjusted EPS of $2.05 rose 19.9% from the year-ago figure. It also exceeded the Zacks Consensus Estimate by 1.9%. It also surpassed the full-year adjusted EPS guidance of $1.99 to $2.02.
Fourth-quarter revenues of $3.73 billion improved 14.9% year over year on a reported basis and 14.5% on an operational basis (at a constant exchange rate or CER). Revenues grew 13.6% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 3.8%. The quarter’s top-line performance also exceeded the company’s projection of 9-11% growth on a reported basis (an increase of 8-10% organically).
Full-year total revenues were $14.24 billion, up 23.3% on a reported basis from 2022 (a 13.1% improvement on an operational basis and up 12.3% on an organic basis). The top line also exceeded the Zacks Consensus Estimate by 0.9%. It also surpassed the company’s full-year net sales growth expectation of approximately 11% on a reported as well as organic basis.
Boston Scientific Corporation Price, Consensus and EPS Surprise
In the fourth quarter, revenues rose 11.4% in the United States on a reported basis (same operationally).
Revenues were up 14% in the Europe, Middle East and Africa (EMEA) region (up 11.6%) and 14.8% in the Asia Pacific zone (up 17%).
Revenues increased 20.8% in Latin America and Canada (up 14.6%).
Reported revenue growth in emerging markets was 16.3% (up 18.7% operationally).
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 $1.75 billion (up 14.2% year over year organically) and $533 million (up 12.2%), respectively, in the fourth quarter.
Within MedSurg, Endoscopy generated revenues of $645 million, up 12.2% organically.
Urology revenues were $527 million, reflecting organic growth of 9.9%.
Neuromodulation within MedSurg reported $269 million in revenues, reflecting a 2.6% organic rise year over year.
Margins
Gross margin in the fourth quarter expanded 42 basis points (bps) year over year to 69.2%. There was a 13.4% rise in the cost of products sold to $1.15 billion in the reported quarter.
Selling, general and administrative expenses rose 18.6% to $1.38 billion. Research and development expenses rose 10% to $363 million. Royalty expenses of $12 million declined 7.7% year over year. Adjusted operating margin contracted 22 bps to 22.1% in the reported quarter.
2024 Guidance
Boston Scientific provided its full-year and first-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 8.5-9.5% on a reported basis and approximately 8-9% on an organic basis. The Zacks Consensus Estimate is currently pegged at $15.32 billion, indicating a 7.6% rise from the 2023 reported figure. Full-year adjusted EPS is expected in the range of $2.23 to $2.27. The Zacks Consensus Estimate is currently pegged at $2.23.
For the first quarter of 2024, revenue growth is projected in the range of approximately 7.5-9.5% on a reported basis (an increase of 7-9% organically). Adjusted earnings are expected in the range of 50-52 cents per share. The Zacks Consensus Estimate for first-quarter earnings and revenues is pegged at 52 cents and $3.68 billion, respectively.
Our Take
Boston Scientific's fourth-quarter 2023 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 business even amid several macroeconomic issues.
Organic and operational revenues at its core business segments and geographies were up in the reported quarter. However, a rise in expenses put pressure on the company’s operating margin.
Zacks Rank and Key Picks
Boston Scientific currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for SiBone’s fourth-quarter 2023 bottom line is pegged at a loss of 28 cents, implying a 12.9% improvement from the year-ago period. The consensus estimate for revenues is pegged at $38.6 million, suggesting 20.8% growth from the fourth quarter of 2022.
SiBone has an estimated long-term earnings growth rate of 14.9% compared with the industry’s 13.4% growth. SIBN’s earnings surpassed estimates in all the trailing four quarters, the average being 24.21%.
The consensus estimate for Surgery Partners’ fourth-quarter 2023 EPS is pegged at 37 cents, implying a 37% improvement from the year-ago period. Revenues are projected to be $741.5 million, suggesting 4.9% growth from the fourth quarter of 2022.
Surgery Partners’ 2024 earnings growth rate is predicted to be 4.8%, while the revenue growth rate is estimated to be 9.2%. SGRY’s earnings surpassed estimates in all the trailing four quarters, the average being 316.07%.
The consensus mark for Haemonetics’ third-quarter fiscal 2024 EPS is pegged at 97 cents, implying a 14.1% improvement from the year-ago period. Projected revenues of $322.5 million suggest 5.6% growth from the fiscal third quarter of 2023.
Haemonetics has a historical long-term earnings growth rate of 9.4% compared with the industry’s 7.5% growth. HAE earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.08%.
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Boston Scientific (BSX) Q4 Earnings Top, Operating Margin Falls
Boston Scientific Corporation (BSX - Free Report) posted adjusted earnings per share (EPS) of 55 cents for the fourth quarter of 2023, up 22.2% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 7.8% and also exceeded the company’s adjusted earnings per share guidance range of 49-52 cents.
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 fourth quarter was 34 cents, reflecting a significant improvement from the year-ago quarter figure of 9 cents.
Full-year adjusted EPS of $2.05 rose 19.9% from the year-ago figure. It also exceeded the Zacks Consensus Estimate by 1.9%. It also surpassed the full-year adjusted EPS guidance of $1.99 to $2.02.
Fourth-quarter revenues of $3.73 billion improved 14.9% year over year on a reported basis and 14.5% on an operational basis (at a constant exchange rate or CER). Revenues grew 13.6% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 3.8%. The quarter’s top-line performance also exceeded the company’s projection of 9-11% growth on a reported basis (an increase of 8-10% organically).
Full-year total revenues were $14.24 billion, up 23.3% on a reported basis from 2022 (a 13.1% improvement on an operational basis and up 12.3% on an organic basis). The top line also exceeded the Zacks Consensus Estimate by 0.9%. It also surpassed the company’s full-year net sales growth expectation of approximately 11% on a reported as well as organic basis.
Boston Scientific Corporation Price, Consensus and EPS Surprise
Boston Scientific Corporation price-consensus-eps-surprise-chart | Boston Scientific Corporation Quote
Q4 Revenues in Detail
In the fourth quarter, revenues rose 11.4% in the United States on a reported basis (same operationally).
Revenues were up 14% in the Europe, Middle East and Africa (EMEA) region (up 11.6%) and 14.8% in the Asia Pacific zone (up 17%).
Revenues increased 20.8% in Latin America and Canada (up 14.6%).
Reported revenue growth in emerging markets was 16.3% (up 18.7% operationally).
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 $1.75 billion (up 14.2% year over year organically) and $533 million (up 12.2%), respectively, in the fourth quarter.
Within MedSurg, Endoscopy generated revenues of $645 million, up 12.2% organically.
Urology revenues were $527 million, reflecting organic growth of 9.9%.
Neuromodulation within MedSurg reported $269 million in revenues, reflecting a 2.6% organic rise year over year.
Margins
Gross margin in the fourth quarter expanded 42 basis points (bps) year over year to 69.2%. There was a 13.4% rise in the cost of products sold to $1.15 billion in the reported quarter.
Selling, general and administrative expenses rose 18.6% to $1.38 billion. Research and development expenses rose 10% to $363 million. Royalty expenses of $12 million declined 7.7% year over year. Adjusted operating margin contracted 22 bps to 22.1% in the reported quarter.
2024 Guidance
Boston Scientific provided its full-year and first-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 8.5-9.5% on a reported basis and approximately 8-9% on an organic basis. The Zacks Consensus Estimate is currently pegged at $15.32 billion, indicating a 7.6% rise from the 2023 reported figure. Full-year adjusted EPS is expected in the range of $2.23 to $2.27. The Zacks Consensus Estimate is currently pegged at $2.23.
For the first quarter of 2024, revenue growth is projected in the range of approximately 7.5-9.5% on a reported basis (an increase of 7-9% organically). Adjusted earnings are expected in the range of 50-52 cents per share. The Zacks Consensus Estimate for first-quarter earnings and revenues is pegged at 52 cents and $3.68 billion, respectively.
Our Take
Boston Scientific's fourth-quarter 2023 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 business even amid several macroeconomic issues.
Organic and operational revenues at its core business segments and geographies were up in the reported quarter. However, a rise in expenses put pressure on the company’s operating margin.
Zacks Rank and Key Picks
Boston Scientific currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are SiBone (SIBN - Free Report) , Surgery Partners (SGRY - Free Report) and Haemonetics (HAE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for SiBone’s fourth-quarter 2023 bottom line is pegged at a loss of 28 cents, implying a 12.9% improvement from the year-ago period. The consensus estimate for revenues is pegged at $38.6 million, suggesting 20.8% growth from the fourth quarter of 2022.
SiBone has an estimated long-term earnings growth rate of 14.9% compared with the industry’s 13.4% growth. SIBN’s earnings surpassed estimates in all the trailing four quarters, the average being 24.21%.
The consensus estimate for Surgery Partners’ fourth-quarter 2023 EPS is pegged at 37 cents, implying a 37% improvement from the year-ago period. Revenues are projected to be $741.5 million, suggesting 4.9% growth from the fourth quarter of 2022.
Surgery Partners’ 2024 earnings growth rate is predicted to be 4.8%, while the revenue growth rate is estimated to be 9.2%. SGRY’s earnings surpassed estimates in all the trailing four quarters, the average being 316.07%.
The consensus mark for Haemonetics’ third-quarter fiscal 2024 EPS is pegged at 97 cents, implying a 14.1% improvement from the year-ago period. Projected revenues of $322.5 million suggest 5.6% growth from the fiscal third quarter of 2023.
Haemonetics has a historical long-term earnings growth rate of 9.4% compared with the industry’s 7.5% growth. HAE earnings surpassed estimates in all the trailing four quarters, the average surprise being 16.08%.