Boston Scientific Beats Profit Forecast as Sales Growth Slows
Adjusted operating margin widened to about 28.4% as profit growth outpaced sales.
Boston Scientific (BSX), the medical-device maker, posted adjusted earnings of $0.86 a share as second-quarter sales growth slowed to 7.5% from 11.6% in the prior quarter.
Net sales rose to $5.442 billion, up about 4.6% sequentially, while organic growth eased to 7.0% from 9.4% in the first quarter and 12.7% in the fourth quarter of 2024. Adjusted earnings increased 14.7% from $0.75 a share a year earlier and rose from $0.80 in each of the previous two quarters.
GAAP diluted earnings rose to $0.61 a share from $0.53 a year earlier, though they fell from $0.90 in the first quarter. Gross margin expanded to about 70.7% from 67.7%, and operating income climbed 43.8% to $1.178 billion, lifting GAAP operating margin to about 21.6% from 16.2%.
Cardiovascular remained the faster-growing segment, with organic sales up 7.8%, compared with 5.4% growth in MedSurg. Both businesses lost momentum from recent quarters, led by Cardiovascular, whose organic growth had been 11.2% in the first quarter and 16.1% in the fourth quarter.
MedSurg performance varied across its businesses. Neuromodulation organic sales rose 12.2% and Endoscopy grew 7.0%, while Urology increased 0.8%. Latin America and Canada was the fastest-growing disclosed region, with operational growth accelerating to 16.2%, as U.S. growth slowed to 6.2%.
The quarter reached the top of Boston Scientific's sales-growth forecast, and adjusted earnings exceeded its $0.82-to-$0.84 guidance range. For the third quarter, the company expects reported and organic sales growth of 3% to 5% and adjusted earnings of $0.80 to $0.82 a share. Its full-year forecast calls for organic growth of 5% to 6% and adjusted earnings of $3.28 to $3.32 a share.
Results included $76 million of litigation-related charges and a $77 million after-tax tariff-refund benefit in the adjusted reconciliation.
Boston Scientific completed a $2 billion accelerated share-repurchase program covering about 40 million shares. It also invested $1.5 billion for an approximately 34% stake in MiRus and secured an exclusive option to acquire the company's transcatheter aortic-valve-replacement business, extending its structural-heart expansion as near-term growth moderates.