Boston Scientific Poised To Deliver Double-Digit Earnings Growth In Q3

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Boston Scientific (NYSE:BSX) is set to announce its Q3 numbers tomorrow, and the company could post high single-digit revenue growth, and low double-digits earnings growth, led by Eluvia and SpyGlass systems. The company’s adjusted EPS has grown at an average of 1.5% y-o-y over the past two quarters, but it is expected to grow at 13% to $0.39 in Q3, driven by both revenue and margin growth. The company has guided for adjusted earnings of $0.37 to $0.39 per share, and the average consensus is at $0.38 per share.  In this note we discuss the company’s expected performance in Q3. You can view our interactive dashboard analysis ~ How Is Boston Scientific Likely To Have Fared In Q3 2019? ~ for more details. In addition, you can see more of our data for Healthcare companies here.

Boston Scientific’s Top Line Has Been In The Range of $2.4 Billion To $2.6 Billion Over The Past Few Quarters, And It Will Likely Be Around the $2.6 Billion Mark In Q3 As Well.

  • Boston Scientific’s total revenues grew at an average annual rate of 5.6% y-o-y over the last 3 quarters, and it could grow at 8.0% in Q3 2019, led by its MedSurg segment.
  • 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 products, that include stimulator systems used for spine and brain related conditions.

The Average Revenue Growth Q-o-Q Has Been Slightly Better For Boston Scientific, When Compared To That of Abbott Labs And Medtronic.

  • Boston Scientific’s revenues growth has fluctuated in the recent quarters. It averaged 1.6% between Q4 2017 and Q2 2019.
  • Abbott Labs revenue growth averaged 0.9% over the last six quarters.
  • Medtronic’s revenue growth averaged 0.6% during the same period.

MedSurg And Cardiovascular Segments Could Drive The Revenue Growth In Q3.

The Company’s Total Expenses Have Increased In The Recent Quarters, But They Have Broadly Declined, When Looked At As A Percentage of Revenues.

  • Boston Scientific’s total expenses, which includes its adjustments as well, has increased from $1.9 billion in Q4 2017 to $2.1 billion in Q2 2019.
  • The figure could be north of $2.0 billion in Q3 2019.
  • However, when looked at as a percentage of revenues, total expenses have declined from 80.1% in Q4 2017 to 79.1% in Q2 2019, and it could decline to a little under 79.0% in Q3 2019.

Adjusted EPS Could Grow By 13% In Q3 2019, Primarily Driven By Higher Revenues, And Slight Growth In Margin.

  • Boston Scientific’s adjusted EPS grew from $0.35 per share in Q4 2017 to $0.39 per share in Q2 2019.
  • It grew 7% y-o-y in Q1 2019, and declined 4% in Q2 2019.
  • It is expected to grow 13% to $0.39 in Q3 2019, at the upper end of the company’s guidance.
  • EPS growth will largely be driven by higher revenues, and slight decline in total expenses as a percentage of revenues.

 

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