- Boston Scientific lowered its full-year outlook again, now expecting sales to grow about 4.25%, down from prior guidance of 5.5% to 6.5%. It also cut its adjusted earnings forecast to $3.16 to $3.18 a share from $3.28 to $3.32, a roughly 4% reduction at the midpoint (Lumida calculation).
- The company expects to end the year with a shrinking business. Fourth-quarter sales are seen falling 1% to 3%, with adjusted earnings of 77 to 79 cents a share, and the shares fell sharply after the update.
- The August cyberattack that disrupted manufacturing and shipping in its medical-device division is still hurting. Boston Scientific had warned in September that it likely would miss third-quarter and full-year expectations because of the attack, and in July it flagged unexpected problems with two core heart-disease products.
- Third-quarter results were mixed. Revenue rose 1.5% to $5.14 billion, ahead of the $5.06 billion FactSet consensus, and adjusted earnings of 73 cents beat estimates by a penny, but profit attributable to shareholders fell to $582 million, or 40 cents a share, from $755 million, or 51 cents, a year earlier.
What Happened?
Boston Scientific reported third-quarter results on Wednesday along with its reduced guidance. Its MedSurg business grew sales 0.6% and its cardiovascular segment grew 1.9%. A 13.1% increase in neuromodulation sales helped offset a less-than-1% decline in endoscopy and a 3.2% drop in urology. “This has been a challenging year for Boston Scientific,” CEO Mike Mahoney said, adding that he remains confident in the company’s long-term strategy.
Why It Matters?
A projected fourth-quarter sales decline is a sharp reversal for a company whose previous guidance called for 5.5% to 6.5% annual sales growth. The episode shows how a cyberattack can turn into a multi-quarter earnings problem when it hits manufacturing and distribution, not just IT systems. Slower growth in cardiovascular, its biggest growth engine, together with the product setbacks flagged in July, raises the risk that competitors gain share while supply is disrupted.
What’s Next?
Investors will look for evidence that production and shipping are fully restored and for the company’s first view of 2027 growth. Any update on the two troubled heart-disease products will be key to whether cardiovascular growth can reaccelerate. Analysts are also likely to probe costs tied to the cyberattack and whether more of the lost sales can be recovered.
Affected Tickers and Coins: BSX, IHI
Source: WSJ
