Boston Scientific Announces Results for First Quarter Ended March 31, 2011
NATICK, Mass., April 20, 2011 /PRNewswire/ -- Boston Scientific Corporation (NYSE: BSX) today announced financial results for the first quarter ended March 31, 2011, as well as net sales and earnings per share (EPS) guidance for the second quarter and updated guidance for the full year 2011. The Company exceeded its adjusted EPS guidance range for the quarter and raised adjusted EPS guidance for the full year 2011. First quarter GAAP results included a previously anticipated gain recognized on the sale of the Neurovascular business of $759 million pre-tax ($530 million after-tax), net of separation costs. In addition, primarily due to a reduction in the estimated size of the U.S. Cardiac Rhythm Management (CRM) market, which led to lower projected U.S. CRM results compared to prior forecasts, the Company also recorded a $723 million (pre- and after-tax) estimated goodwill impairment charge associated with its U.S. CRM business unit during the quarter. As a result, GAAP EPS for the first quarter of 2011 was below previous guidance, and the Company's updated full year GAAP EPS guidance reflects this charge. The amount of the goodwill impairment charge is subject to finalization and is estimated to range between $650 million and $800 million.
First quarter highlights:
- Achieved sales of $1.925 billion, at the high end of the Company's previous guidance range, and adjusted EPS of $0.22, exceeding previous guidance; reported GAAP earnings of $0.01 per share, lower than previous guidance due primarily to the impact of a $0.47 per share goodwill impairment charge.
- Maintained leadership position in the drug-eluting stent market with a worldwide share of 36 percent and U.S. share of 46 percent (each excluding a negative one-share point impact of product transition reserves), and continued to grow PROMUS Element™ sales, with a European market share of more than 25 percent during the quarter.
- Filed a U.S. pre-market approval application with the FDA for the PROMUS Element Everolimus-Eluting Platinum Chromium Coronary Stent System, following positive PLATINUM clinical trial results.
- Increased worldwide Neuromodulation sales 14 percent, Endoscopy sales 8 percent, Urology/Women's Health sales 5 percent and Peripheral Interventions (PI) sales 4 percent all on a constant currency basis, on the strength of new product introductions and continued adoption.
- Continued to realign the product portfolio as part of the Company's POWER strategy, strengthening our PI franchise with the announcement of the acquisitions of S.I. Therapies and ReVascular Therapeutics.
- Reduced gross debt obligations to $4.7 billion with prepayments of $500 million during the quarter and an additional $250 million of term loan debt in April.
"Despite an increasingly challenging U.S. CRM market and the resulting goodwill implications, we had several notable accomplishments during the quarter that illustrate progress toward the achievement of strategic milestones," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "Our sales were at the high end of our projected range, we benefited from our cost-reduction initiatives, and we continue to aspire to double-digit EPS growth in the near term. Our increased financial flexibility has enabled us to reduce debt, expand our Emerging Markets footprint and complete six acquisitions in the past six months."
Net sales for the first quarter of 2011 were $1.925 billion, as compared to net sales of $1.960 billion for the first quarter of 2010, a decrease of 2 percent. Excluding the impact of foreign currency and sales from divested businesses, net sales decreased 1 percent as compared to the prior period.
Worldwide CRM net sales for the first quarter - on a reported basis - were as follows: