Boston Scientific's ($BSX) interim CEO Hank Kucheman has spent months lowering short-term expectations. He's argued that sales and revenue likely won't rebound until 2013, when benefits of the company's ongoing restructuring start kicking in. In that respect, the struggling medical device company's 2012 third-quarter earnings didn't disappoint, and generally met diminished predictions.
Overall sales--at more than $1.7 billion for the quarter--dropped 7% compared to the more than $1.87 billion generated during the same period last year. Boston Scientific also reported a $725 million loss (equal to 52 cents per share), which was lower than previously announced. The cause: A non-cash $809 million goodwill impairment charge driven, in part, by reduced estimates of the U.S. cardiac rhythm management market size.
There are few bright spots to report. Interventional cardiology sales plunged a whopping 20%, to $494 million during the quarter, from $613 million a year ago. Cardiac rhythm management, which includes pacemakers and ICDs, booked $462 million in sales during the quarter, down 8% from $503 million in the 2011 third quarter. Electrophysiology revenue dipped 2%, to $35 million, from $36 million over the same period in 2011.
We did tell you about bright spots: Endoscopy sales grew 4%, hitting $310 million from $298 million a year ago. Neuromodulation is also growing; the sector generated a 5% sales hike year-over-year, to $88 million from $84 million. And urology/women's health product revenue grew slightly, hitting $125 million from $124 million in the 2011 third quarter.
To be sure, Boston Scientific is still transitioning through massive layoffs, restructuring and some major acquisitions (BridgePoint Medical and Rhythmia Medical in recent weeks). Longer-term, the goal is that these efforts and overall diversification will help the company rebound. A major seed planted with this in mind is already sprouting--Boston Scientific's $150 million-plus purchase of Cameron Health. Thanks to that action, the company is now the proud owner of a wireless S-ICD defibrillator that just gained FDA approval, and its launch is expected to be a blockbuster and industry game-changer.
"We remain focused on executing our strategy to drive this organization back to revenue growth," Kucheman said in an earnings-related prepared statement. Next on that strategy list: Kucheman will step down as CEO on Nov. 1, so company president and veteran Johnson & Johnson ($JNJ) executive Mike Mahoney can fully take over the company in a transition plan initially mapped out a year ago.
- read the release