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Boston Scientific Corp. Reports Operating Results (10-Q)

August 07, 2012 | About:
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10qk

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Boston Scientific Corp. (BSX) filed Quarterly Report for the period ended 2012-06-30.

Boston Scientific Corporation has a market cap of $7.6 billion; its shares were traded at around $5.33 with a P/E ratio of 9.5 and P/S ratio of 1. Boston Scientific Corporation had an annual average earning growth of 0.9% over the past 10 years.

Highlight of Business Operations:

Our Endoscopy division develops and manufactures devices to treat a variety of medical conditions including diseases of the digestive and pulmonary systems. Our worldwide net sales of these products were $311 million in the second quarter of 2012, as compared to $298 million in the second quarter of 2011, an increase of $13 million, or four percent. U.S. net sales of our Endoscopy products were $151 million for the second quarter of 2012, as compared to $141 million for the same period in the prior year. Our international net sales were $160 million for the second quarter of 2012, as compared to $157 million for the second quarter of 2011, and included a $7 million negative impact from changes in foreign currency exchange rates. Excluding the impact of changes in foreign currency exchange rates, our worldwide Endoscopy net sales increased $20 million, or seven percent, in the second

Our PI product offerings include stents, balloon catheters, wires, peripheral embolization devices and other devices used to diagnose and treat peripheral vascular disease. Our worldwide net sales of these products were $196 million in the second quarter of 2012, as compared to $189 million in the second quarter of 2011, an increase of $7 million, or four percent. Our U.S. net sales of these products were $86 million in the second quarter of 2012, as compared to $80 million in the second quarter of 2011. Our international net sales were $110 million in the second quarter of 2012, as compared to $109 million in the second quarter of 2011, and included a $5 million negative impact from changes in foreign currency exchange rates. Excluding the impact of changes in foreign currency exchange rates, our worldwide PI net sales increased $12 million, or seven percent, in the second quarter of 2012, as compared to the second quarter of 2011. The year over year increase in worldwide PI net sales was driven by growth in our core PI franchise following the recent launches of our next-generation Mustang™ percutaneous transluminal angioplasty (PTA) balloon; our Coyote™ balloon catheter, a highly deliverable and ultra-low profile balloon dilatation catheter designed for a wide range of peripheral angioplasty procedures; our Charger™ PTA Balloon Catheter, launched in the U.S. in December 2011; and our Gladiator™ Balloon Dilatation Catheter. In addition, our PI stent systems continued to grow on the strength of the EPIC™ self-expanding nitinol stent system in the U.S. and certain international markets and the Carotid WALLSTENT® stent system in Japan. We launched the INNOVA™ self-expanding bare metal stent system in certain international markets in the second quarter of 2012, and we believe this launch, in addition to a number of new PI products expected to launch throughout the second half of 2012, will help to drive future growth in this business.

Worldwide net sales of our CRM products of $488 million represented approximately 27 percent of our consolidated net sales for the second quarter of 2012. Our worldwide CRM net sales decreased $56 million, or ten percent, in the second quarter of 2012, as compared to the second quarter of 2011. Excluding the impact of changes in foreign currency exchange rates, which had a $16 million negative impact on our second quarter 2012 CRM net sales as compared to the same period in the prior year, our CRM net sales decreased $40 million, or eight percent. Our U.S. CRM net sales decreased $31 million, or 10 percent, in the second quarter of 2012 as compared to the second quarter of 2011. The reduction in our CRM net sales during the second quarter of 2012 is primarily due to the impact of lower procedural volumes as a result of the contraction in the U.S. ICD market in 2011, due to the factors discussed in our 2011 Annual Report filed on Form 10-K. Although we believe many of these factors are subsiding and we believe procedural volumes are beginning to stabilize, there can be no assurance we won't experience additional market declines in the future. However, we believe that the recent launches of our next-generation line of defibrillators, and the U.S. launches of our INGENIO™ pacemaker system and INVIVE™ CRT-Ps in the second quarter of 2012, will help enhance our position in the U.S. CRM market. Our international CRM net sales decreased $25 million, or 11 percent, in the second quarter of 2012, as compared to the second quarter of 2011. Excluding the impact of changes in foreign currency exchange rates, which had a $16 million negative impact on net sales in the second quarter of 2012, as compared to the same period in the prior year, our international CRM net sales decreased $9 million, or five percent, as compared to the same period in the prior year, due primarily to lower average selling prices driven by competitive and other pricing pressures.

Worldwide net sales of our coronary stent systems, including bare-metal stent systems, of $340 million represented approximately 19 percent of our consolidated net sales in the second quarter of 2012. Our worldwide net sales of these products decreased $88 million, or 21 percent, in the second quarter of 2012, as compared to the second quarter of 2011. Excluding the impact of changes in foreign currency exchange rates, which had a $11 million negative impact on our coronary stent system net sales in the second quarter of 2012, as compared to the same period in the prior year, net sales of these products decreased $77 million, or 18 percent. We believe our share of the worldwide drug-eluting stent market approximated 31 percent during the second quarter of 2012. Our U.S. net sales of drug-eluting stent systems decreased $68 million, or 33 percent, in the second quarter of 2012, as compared to the second quarter of 2011. This decrease was primarily the result of a reduction in our average U.S. drug-eluting stent market share to an estimated 39 percent in the second quarter of 2012, as compared to an estimated 50 percent in the second quarter of 2011, which we believe is primarily a result of the launch of new competitive products and physician trialing of these products. During the second quarter of 2012, we substantially completed the conversion of our U.S. drug-eluting stent system sales to self-manufactured PROMUS® Element™ and TAXUS® stent systems, which has positively impacted our gross profit margins. Our international drug-eluting stent system net sales decreased $14 million, or seven percent, in the second quarter of 2012, as compared to the second quarter of 2011. Excluding the impact of changes in foreign currency exchange rates, which had a $10 million negative impact on our international drug-eluting stent system net sales for the second quarter of 2012, as compared to the same period in the prior year, net sales of our drug-eluting stent systems decreased $4 million, or two percent. In March of 2012, we launched our PROMUS® Element™ stent system in Japan, and during the second quarter of 2012, substantially completed the conversion of our remaining PROMUS® stent system sales to our self-manufactured PROMUS® Element™ stent systems, which has positively impacted our gross profit margins.

In addition to coronary stent systems, our Interventional Cardiology business markets balloon catheters, rotational atherectomy systems, guide wires, guide catheters, embolic protection devices, and diagnostic catheters used in percutaneous transluminal coronary angioplasty (PTCA) procedures, as well as intravascular ultrasound (IVUS) imaging systems. Our worldwide net sales of these products were $209 million in the second quarter of 2012, as compared to $224 million in the second quarter of 2011, a decrease of $15 million, or seven percent. Our U.S. net sales were $78 million in the second quarter of 2012, as compared to $90 million in the second quarter of 2011. Our international net sales of these products were $131 million in the second quarter of 2012, as compared to $134 million in the second quarter of 2011, and included a $7 million unfavorable impact from changes in foreign currency exchange rates for the second quarter of 2012, as compared to the same period in the prior year. Excluding the impact of changes in foreign currency exchange rates, Interventional Cardiology (excluding coronary stent systems) net sales increased $4 million, or three percent, as compared to the same period in the prior year. In April 2012, we received CE Mark approval for and launched our Emerge™ PTCA Dilatation Catheter in our EMEA region. This next-generation pre-dilatation balloon catheter combines several innovative balloon technologies in a single versatile platform and is designed to offer exceptional deliverability to address challenging lesions. We expect to launch the Emerge™ platform in the U.S. in the third quarter of 2012. We believe this launch, as well as the expected launch of additional new products in vascular access, balloon catheters and IVUS during 2012, will help improve the performance of this business.

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