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Boston Scientific (BSX) Q2 Earnings Beat, Organic Sales Rise
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Boston Scientific Corporation (BSX - Free Report) posted adjusted earnings per share (EPS) of 62 cents for the second quarter of 2024, up 16.9% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 6.9% and also exceeded the company’s adjusted earnings per share guidance range of 57-59 cents per share.
The quarter’s adjustments included certain intangible asset impairment charges, amortization expenses, acquisition/divestitures-related net charges, and restructuring and restructuring-related charges, among others.
Reported EPS for the second quarter was 22 cents, reflecting a 22.2% improvement from the year-ago quarter figure.
Second-quarter revenues of $4.12 billion improved 14.5% year over year on a reported basis and 16.1% on an operational basis (at a constant exchange rate or CER). Revenues grew 14.7% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 2.5%. The quarter’s top-line performance also exceeded the company’s projection of 10.5-12.5% growth on a reported basis (an increase of 10-12% organically).
Q2 Revenues in Detail
In the second quarter, revenues rose 16.9% in the United States on a reported basis (same operationally).
Revenues were up 13.7% in the Europe, Middle East and Africa (EMEA) region (up 16.1%) and 7% in the Asia Pacific zone (up 13.2%).
Revenues increased 15.3% in Latin America and Canada (up 15.7%).
Reported revenue growth in emerging markets was 14.8% (up 19.3% operationally).
Boston Scientific Corporation Price, Consensus and EPS Surprise
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. Cardiology and Peripheral Interventions sales, its sub-segments, were $2.05 billion (up 22% year over year organically) and $590 million (up 9.4%), respectively, in the second quarter.
Within MedSurg, Endoscopy generated revenues of $676 million, up 7.9% organically.
Urology revenues were $525 million, reflecting organic growth of 9.1%.
Neuromodulation within MedSurg reported $282 million in revenues, reflecting a 3.7% rise organically year over year.
Margins
Gross margin in the second quarter contracted 143 basis points (bps) year over year to 69.2%. There was a 20% rise in the cost of products sold to $1.27 billion in the reported quarter.
Selling, general and administrative expenses rose 6.8% to $1.45 billion. Research and development expenses rose 6.7% to $383 million. Royalty expenses of $9 million, however, declined 25% year over year. Adjusted operating margin expanded 189 bps to 24.6% in the reported quarter.
2024 Guidance
Boston Scientific updated its full-year guidance and provided its third-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 13.5-14.5% on a reported basis (up from the earlier expectation of 11-13% growth) and approximately 13-14% on an organic basis (10-12% growth projected earlier). The Zacks Consensus Estimate is currently pegged at $15.99 billion, indicating a 12.3% rise from the 2023 reported figure. Full-year adjusted EPS is expected in the range of $2.38 to $2.42 ($2.29 to $2.34 estimated earlier). The Zacks Consensus Estimate is currently pegged at $2.32.
The company estimates net sales growth in the third quarter of 2024 to be in the range of approximately 13% to 15% year over year on both reported and organic basis. The third-quarter organic net sales guidance excludes the impact of foreign currency fluctuations and net sales attributable to acquisitions and divestitures for which there is less than a full period of comparable net sales. The company estimates EPS on a GAAP basis in the range of 36 cents to 38 cents and adjusted EPS, excluding certain charges (credits), in the range of 57 cents to 59 cents.
For the third quarter of 2024, revenue growth is projected in the range of approximately 13-15% on a reported basis (same organically). Adjusted earnings are expected in the range of 57-59 cents per share. The Zacks Consensus Estimate for third-quarter earnings and revenues is pegged at 57 cents per share and $3.95 billion, respectively.
Our Take
Boston Scientific's second-quarter 2024 adjusted earnings and revenues exceeded the respective Zacks Consensus Estimate. The company registered a strong year-over-year improvement in sales, indicating solid market share gains in legacy businesses across all geographic regions despite macroeconomic odds.
Organic and operational revenues at its core business segments were up in the reported quarter. A raised 2024 guidance and an optimistic third-quarter forecast are expected to increase investors’ confidence in the stock.
However, rising costs put pressure on the company’s gross margin.
Zacks Rank and Other Key Picks
Boston Scientific currently carries a Zacks Rank #2 (Buy).
Globus Medical has an estimated earnings growth rate of 21.6% for 2024 compared with the industry’s 11.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average being 10.8%.
Insulet has an estimated long-term earnings growth rate of 17.9% compared with the industry’s 14.7%. PODD surpassed earnings estimates in each of the trailing four quarters, the average being 83%.
Haemonetics has an estimated fiscal 2025 earnings growth rate of 15.4% compared with the industry’s 12.5%. HAE surpassed earnings estimates in each of the trailing four quarters, the average being 13.2%.
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Boston Scientific (BSX) Q2 Earnings Beat, Organic Sales Rise
Boston Scientific Corporation (BSX - Free Report) posted adjusted earnings per share (EPS) of 62 cents for the second quarter of 2024, up 16.9% from the year-ago figure. The figure beat the Zacks Consensus Estimate by 6.9% and also exceeded the company’s adjusted earnings per share guidance range of 57-59 cents per share.
The quarter’s adjustments included certain intangible asset impairment charges, amortization expenses, acquisition/divestitures-related net charges, and restructuring and restructuring-related charges, among others.
Reported EPS for the second quarter was 22 cents, reflecting a 22.2% improvement from the year-ago quarter figure.
Second-quarter revenues of $4.12 billion improved 14.5% year over year on a reported basis and 16.1% on an operational basis (at a constant exchange rate or CER). Revenues grew 14.7% on an organic basis (adjusted for foreign currency fluctuations and certain recent acquisitions and divestments). The top line exceeded the Zacks Consensus Estimate by 2.5%. The quarter’s top-line performance also exceeded the company’s projection of 10.5-12.5% growth on a reported basis (an increase of 10-12% organically).
Q2 Revenues in Detail
In the second quarter, revenues rose 16.9% in the United States on a reported basis (same operationally).
Revenues were up 13.7% in the Europe, Middle East and Africa (EMEA) region (up 16.1%) and 7% in the Asia Pacific zone (up 13.2%).
Revenues increased 15.3% in Latin America and Canada (up 15.7%).
Reported revenue growth in emerging markets was 14.8% (up 19.3% 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. Cardiology and Peripheral Interventions sales, its sub-segments, were $2.05 billion (up 22% year over year organically) and $590 million (up 9.4%), respectively, in the second quarter.
Within MedSurg, Endoscopy generated revenues of $676 million, up 7.9% organically.
Urology revenues were $525 million, reflecting organic growth of 9.1%.
Neuromodulation within MedSurg reported $282 million in revenues, reflecting a 3.7% rise organically year over year.
Margins
Gross margin in the second quarter contracted 143 basis points (bps) year over year to 69.2%. There was a 20% rise in the cost of products sold to $1.27 billion in the reported quarter.
Selling, general and administrative expenses rose 6.8% to $1.45 billion. Research and development expenses rose 6.7% to $383 million. Royalty expenses of $9 million, however, declined 25% year over year. Adjusted operating margin expanded 189 bps to 24.6% in the reported quarter.
2024 Guidance
Boston Scientific updated its full-year guidance and provided its third-quarter 2024 projections.
Full-year net sales growth is expected to be approximately 13.5-14.5% on a reported basis (up from the earlier expectation of 11-13% growth) and approximately 13-14% on an organic basis (10-12% growth projected earlier). The Zacks Consensus Estimate is currently pegged at $15.99 billion, indicating a 12.3% rise from the 2023 reported figure. Full-year adjusted EPS is expected in the range of $2.38 to $2.42 ($2.29 to $2.34 estimated earlier). The Zacks Consensus Estimate is currently pegged at $2.32.
The company estimates net sales growth in the third quarter of 2024 to be in the range of approximately 13% to 15% year over year on both reported and organic basis. The third-quarter organic net sales guidance excludes the impact of foreign currency fluctuations and net sales attributable to acquisitions and divestitures for which there is less than a full period of comparable net sales. The company estimates EPS on a GAAP basis in the range of 36 cents to 38 cents and adjusted EPS, excluding certain charges (credits), in the range of 57 cents to 59 cents.
For the third quarter of 2024, revenue growth is projected in the range of approximately 13-15% on a reported basis (same organically). Adjusted earnings are expected in the range of 57-59 cents per share. The Zacks Consensus Estimate for third-quarter earnings and revenues is pegged at 57 cents per share and $3.95 billion, respectively.
Our Take
Boston Scientific's second-quarter 2024 adjusted earnings and revenues exceeded the respective Zacks Consensus Estimate. The company registered a strong year-over-year improvement in sales, indicating solid market share gains in legacy businesses across all geographic regions despite macroeconomic odds.
Organic and operational revenues at its core business segments were up in the reported quarter. A raised 2024 guidance and an optimistic third-quarter forecast are expected to increase investors’ confidence in the stock.
However, rising costs put pressure on the company’s gross margin.
Zacks Rank and Other Key Picks
Boston Scientific currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space are Globus Medical (GMED - Free Report) , Insulet (PODD - Free Report) and Haemonetics (HAE - Free Report) . While Globus Medical and Insulet sport a Zacks Rank #1 (Strong Buy) each, Haemonetics carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical has an estimated earnings growth rate of 21.6% for 2024 compared with the industry’s 11.7%. GMED’s earnings surpassed estimates in each of the trailing four quarters, the average being 10.8%.
Insulet has an estimated long-term earnings growth rate of 17.9% compared with the industry’s 14.7%. PODD surpassed earnings estimates in each of the trailing four quarters, the average being 83%.
Haemonetics has an estimated fiscal 2025 earnings growth rate of 15.4% compared with the industry’s 12.5%. HAE surpassed earnings estimates in each of the trailing four quarters, the average being 13.2%.