Medical devices group Boston Scientific posted lower-than-expected quarterly profit yesterday as sales of its flagship drug-eluting heart stents fell by 32 per cent.
Boston Scientific, whose shares sank to their lowest level in more than three months, derives most of its revenue from stents, tiny tubular devices that prop open diseased heart arteries, and implantable heart devices that manage abnormal heart rhythms.
Ireland is one of the group's main manufacturing bases, accounting for around 40 per cent of Boston Scientific's worldwide capacity.
The company said those markets did not perform as well as expected in the latest quarter, and it issued a third-quarter profit forecast that analysts said was below Wall Street estimates.
"It is clear to us that the [drug-eluting stent] and [cardiac rhythm management] markets are not recovering as fast as we expected," chief executive Jim Tobin said.
The company, which also makes products used in urology, oncology and gynaecology, said second-quarter profit, excluding one-time items, was $271 million (€196 million), or 18 US cents per share, down from $412 million, or 31 cents per share, a year ago.
The consensus estimate on Wall Street was for a profit of 19 cents per share.
Quarterly sales dipped to $2.07 billion from $2.11 billion, off Wall Street's consensus forecast of $2.09 billion. Drug-eluting heart stent sales declined to $437 million from $647 million. That will be a blow for its Galway plant where the taxus stent was first developed and where 3,000 people are engaged primarily in its manufacture.
Sales of implantable cardioverter defibrillators, or ICDs - part of the Cardiac Rhythm Management business acquired when Boston Scientific bought Guidant in 2006 - were $377 million. The year-earlier total, if Boston Scientific had owned the business at that time, would have been $383 million.
David Heupel, portfolio manager of Thrivent Investment Management, which holds shares of rivals St Jude Medical and Medtronic, said the real disappointment was Boston Scientific's ICD sales. He said St Jude reported relatively strong ICD sales earlier this week.
Boston Scientific's ICD sales total "implies the market is not growing as fast as we had hoped, or they are losing share, or probably both", Mr Heupel said.
Sam Leno, Boston Scientific's chief financial officer for six weeks, noted the need to reduce expenses and headcount. That will be the focus through 2008, he said. Boston Scientific, based in Massachusetts, forecast third-quarter sales of $2 billion to $2.1 billion. - (Reuters)
