Boston Scientific Beats Revenue Challenges but Staggers on Eps

Boston Scientific came out swinging for its 3Q22 earnings in what can only be called a challenging time for the medtech industry.

Inflation, staffing shortages, and supply chain issues all have been part of the forecast for companies this year – but Boston Scientific seemed to weather the storm a bit better than in previous quarters.

The Marlborough, MA -based company beat consensus forecast for revenue but missed on earnings by a penny.

Boston Scientific posted revenues of $3.17 billion compared to the revenues of $2.93 billion this time last year. The company clocked in at an EPS of 43 cents vs. consensus of 44 cents.

Marie Thibault, an analyst with BTIG wrote in a report that, “The revenue beat was driven by broad-based strength across various regions and above-market growth in most of Boston Scientific’s product segments. The adjusted earnings per share miss was the result of Fx headwinds, inflation, and investments.”

Revenue growth is now expected to be at 6.5% - at the bottom of it revealed in 2Q22. Boston Scientific also predicted adjusted earnings per share of $1.71 to $1.74 which was down from the previous $1.74 and $1.77.

"I'm pleased with our team's ongoing commitment to executing our strategy, and the double-digit organic revenue growth we delivered across nearly every business," said Mike Mahoney, chairman and chief executive officer, Boston Scientific. "Despite ongoing challenges in the macro environment, we remain focused on enhancing our portfolio and delivering strong global performance."

Boston Sci's Moves in 3Q22

The quarter was filled with some twists and turns. Notably, Boston Scientific got involved with M&A something the company excelled at in 2018.

However, dealmaking in medtech has been particularly sparse over the last six months, said John Babitt, a Lifesciences Partner at EY, during a roundtable discussion with media, held earlier this month.

The first half of July to December of 2021 was a pretty active M&A sector, but really over the last six months the M&A space has really paused for lack of a better word,” Babitt said during a media roundtable. “We’ve seen a lot of those private companies defer sale processes, raise additional venture capital, and really pin their sights on 2023.”

In August, Boston Scientific acquired Obsidio, a privately held startup that has developed the Gel Embolic Material (GEM) technology used for embolization of blood vessels in the peripheral vasculature.

And in June, Boston Scientific broke its M&A silence by announcing it would buy a majority stake (about 64%) in M.I. Tech. The Korea-based company makes devices for endoscopic and urologic procedures.  

But 3Q22 was a bed of roses for Boston Scientific Sure there were good deals but there were also some setbacks.

During the Transcatheter Cardiovascular Therapeutics (TCT) annual scientific symposium Boston Scientific revealed that its Sentinel Cerebral Protection system failed to meet the primary endpoint of reduced stroke in the PROTECTED TAVR study.