Boston Scientific's ($BSX) 2013 second quarter numbers reflect growth in a few business segments and sluggishness in others, but also some promising increases in net income. Good news may be starting to outweigh the bad, as the company continues to plant seeds for a return to solid, long-term growth.
|CEO Mike Mahoney|
"We are pleased with our improved performance during the quarter," company president and CEO Mike Mahoney said in a statement.
First, the numbers: The company booked $1.8 billion in net sales during the quarter, at the high end of their guidance range, a dip of about 1% compared to the same period in 2012. Boston Scientific also generated $130 million in net income during the quarter, despite revenue declines in some sectors such as interventional cardiology, cardiac rhythm management, and women's health. But the net income is an enormous improvement over the company's eye-popping $3.5 million net loss in the 2012 second quarter--a number affected, in part, by a number of one-time charges.
Under Mahoney's leadership so far this year, Boston Scientific continued diversifying and beefing up its offerings during the second quarter. One highlight: It snatched up C.R. Bard's ($BCR) electrophysiology business toward the end of June for $275 million in a bid to boost offerings and revenue for a business line that has struggled. The company also touts the fact that it generated positive clinical data for products including its Vessix Renal Denervation System, which the company acquired when it snatched up Vessix Vascular for $425 million. As well, Boston Scientific's Watchman left atrial appendage closure device, Lotus aortic valve system and Vercise deep brain stimulation system--all acquired products--generated positive clinical trial results during the quarter.
It is true, cardiovascular global sales hit $719 million during the quarter, a 4% decline from $745 million generated during the fiscal 2012 second-quarter. And Cardiac rhythm management booked $511 million in sales, down 3% from $525 million generated over the same period last year. But some of Boston Scientific's newer business lines reflect the promise of diversification. Endoscopy sales grew to $325 million during the quarter, up 5% from $311 million last year. Most impressively, neuromodulation revenue grew to $111 million, up a gigantic 21% from the $91 million booked in the 2012 second quarter.
Global pricing and reimbursement pressures may continue to be an obstacle for Boston Scientific's traditional cardiac-related business lines. But the diversification strategy, while it isn't bearing fruit just yet, seems to be strengthening.
- read the release