Device giant Boston Scientific ($BSX) is coping with pricing pressures and weak international growth, reporting a net loss of $3.4 billion for the second quarter.
The company took a $3.43 billion goodwill impairment charge in its Europe, Middle East, and Africa unit, which the company blames on low projected long-term growth rates in those markets thanks to macroeconomic factors and its lagging performance in Europe. In Q2 last year, Boston Sci netted a $146 million profit.
Aside from the hefty goodwill impairment charge, the company saw its sales decline by 5%, dropping by almost $150 million to $1.8 billion on the quarter. Cardiac rhythm management, which includes Boston Sci's line of ICDs, fell 8% to $488 million, and the interventional cardiology unit reported a sales decline of 13%, down to $549 million. While those hits to its two largest businesses certainly hurt, Boston Sci did see some growth elsewhere, with neuromodulation sales jumping 10% and endoscopy going up 7%.
The company is still in transition after launching a restructuring effort in 2010, looking to slim down and make its operations more efficient. Boston Sci is banking on its CRM unit for the future, this year acquiring Cameron Health and its subcutaneous ICD that the company hopes to get on the U.S. market next year.
And Boston Sci is looking for an entry into the renal denervation device game, tabbed by analysts as the next big money-maker for the industry, planning a first in-man study of its RDN device this year and a CE mark by 2013. However, the company lags behind Medtronic ($MDT), St. Jude Medical ($STJ) and Covidien ($COV) in the race to get a next-gen hypertension device on the market stateside.
- read Boston Scientific's statement
- here's the WSJ's take
- get more from Reuters