Beleaguered healthcare device maker Boston Scientific Corp ($BSX) hadn’t inspired much confidence form analysts this year. In April, Credit Suisse downgraded the stock, and Citigroup (C) lowered their expectations as well in July. Both houses expressed skepticism that new devices like the Watchman Left Atrial Appendage (used to treat irregular heartbeats) could counteract the rapid obsolescence of their older product lines.
But the Natick, Mass.-headquartered company surprised analysts when they reported second quarter 2013 earnings on July 25. Though revenue fell 1 percent from the previous quarter, it didn’t fall as much as some analysts had feared. The company was spurred by maintained sales in older products and a 21 percent increase in sales in the neuromodulation division, which produces implantable devices used to manage pain.
The second quarter of the previous year was unusual as the company took a $3.6 billion write down to reflect lower projected long-term growth rates in Europe.
Excluding special items, Boston Scientific reported net income of $247 million, or $0.18 per share, versus the $239 million a share, or $0.17 per share, from the same period a year ago. Revenue for the quarter was $1.81 billion, as compared to $1.25 billion from the previous year. Analysts were expecting a profit of $0.09 per share on revenues of $1.78 billion.
The company's stock is still far down from its price in 2004, when they traded north of $40 a share.
Boston Scientific purchased the device maker Guidant in 2006 for 27.2 billion in cash. The major move proved to be a disaster for the company, and was fraught with costly litigation and product recalls, which the company’s stock has still yet to fully recover from.
But the company’s stock is up 63.64 percent on the year, and executives have expressed optimism for the company moving forward in 2013. Their stock shot up as much as 15 percent on July 24 following the improved earnings and optimistic outlook. The stock is currently up 10.98 percent to hit $10.66.
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