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Why Is Boston Scientific (BSX) Up 7.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Boston Scientific (BSX - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Boston Scientific due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Boston Scientific Q2 Earnings Beat Estimates, View Up
Boston Scientificposted adjusted earnings per share 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).
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 earnings per share 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Boston Scientific has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Boston Scientific has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Boston Scientific belongs to the Zacks Medical - Products industry. Another stock from the same industry, Abbott (ABT - Free Report) , has gained 5.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Abbott reported revenues of $10.38 billion in the last reported quarter, representing a year-over-year change of +4%. EPS of $1.14 for the same period compares with $1.08 a year ago.
For the current quarter, Abbott is expected to post earnings of $1.20 per share, indicating a change of +5.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Abbott has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Why Is Boston Scientific (BSX) Up 7.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Boston Scientific (BSX - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Boston Scientific due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Boston Scientific Q2 Earnings Beat Estimates, View Up
Boston Scientificposted adjusted earnings per share 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).
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 earnings per share 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, Boston Scientific has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Boston Scientific has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Boston Scientific belongs to the Zacks Medical - Products industry. Another stock from the same industry, Abbott (ABT - Free Report) , has gained 5.8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Abbott reported revenues of $10.38 billion in the last reported quarter, representing a year-over-year change of +4%. EPS of $1.14 for the same period compares with $1.08 a year ago.
For the current quarter, Abbott is expected to post earnings of $1.20 per share, indicating a change of +5.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Abbott has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.