What To Expect From Boston Scientific’s Q1?

by Trefis Team
Boston Scientific
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Boston Scientific (NYSE:BSX) is expected to publish its Q1 2019 results on April 24. This note details Trefis’ forecasts for Boston Scientific, as well as some of the key trends we will be watching when the company reports earnings. You can view our interactive dashboard analysis ~ How Is Boston Scientific Likely To Have Fared In Q1? for more details on the key drivers of the company’s expected Q1 performance. In addition, you can see more of our data for Healthcare companies here.

How have Boston Scientific’s revenues changed over recent quarters, and what’s the forecast for Q1 2019?

  • Total Revenues for Boston Scientific have largely trended higher over recent quarters.
  • They grew from $2.4 billion in Q4 2017 to $2.6 billion in Q4 2018.
  • The growth can primarily be attributed to higher sales for Endoscopy and Neuromodulation.
  • We estimate Boston Scientific’s revenues to be $2.52 billion for Q1; a figure 6% higher than what it reported a year ago.

What are Boston Scientific’s key sources of revenue?

  • Boston Scientific generates its revenues primarily from three segments ~ MedSurg, Cardiovascular, and Rhythm & Neuro.
  • MedSurg division comprises of medical devices designed and manufactured for Endoscopy, and Urology & Pelvic Health.
  • Cardiovascular division comprises of products designed for interventional cardiology and peripheral inventions.
  • Rhythm & Neuro segment primarily includes Cardiac Rhythm Management (Pacemakers and Defibrillators) products that are used to treat abnormal heart conditions, along with Neuromodulation.
  • Neuromodulation products include stimulator systems used for spine and brain related conditions.

What to expect from the MedSurg segment?

  • MedSurg revenues have grown from $745 million in Q4 2017 to $800 million in Q4 2018.  We forecast the revenues to be $768 million in Q1 2019, reflecting high single-digit growth (y-o-y).
  • The segment has seen steady growth in the recent past, led by higher endoscopy sales.
  • Endoscopy business is seeing higher demand for Resolution 360 Clips, and SpyGlass DS Direct Visualization System.
  • The company is seeing robust growth in LithoVue Digital Flexible Ureteroscope, and NxThera’s Rezûm System, and this trend will likely continue in the near term.
  • The company’s management expects 110 basis points contribution to the top line from its recent acquisitions, including NxThera, in 2019.

What to expect from the Cardiovascular business?

  • Cardiovascular segment revenues have grown from $913 million in Q4 2017 to $970 million in Q4 2018.
  • We forecast the revenues to grow in mid-single-digits in Q1 2019.
  • This growth will likely be led by higher Eluvia sales, which was recently launched in the U.S.
  • The IMPERIAL study demonstrated that Eluvia was ahead in terms of 1-year patency over the Zilver PTX stent of Cook Medical.
  • This should bode well for the company, and Eluvia will likely drive the segment revenue growth in the near term.

How much can the Rhythm & Neuro segment grow?

  • Rhythm & Neuro revenues have grown from $751 million in Q4 2017 to $790 million in Q4 2018.
  • We forecast the revenues to grow in mid-single-digits to $780 million in Q1 2019.
  • The segment will likely benefit from continued growth in Neuromodulation and Electrophysiology, primarily led by Spectra WaveWriter Spinal Cord Stimulator (SCS) Systems, which allows the combination of multiple treatment options in one single device.


What will be the impact of the above on Boston Scientific’s EPS?

  • We expect the earnings to be $0.35 per share on an adjusted basis in Q1.
  • This reflects 8% growth from the prior year quarter.
  • The growth in earnings will likely be led by higher revenues, and higher margins.
  • The company has seen a slight improvement in its margins over the recent quarters, and this trend should continue in Q1 as well.


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