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Boston Scientific Corporation Message Board

  • AMERICRANE AMERICRANE Nov 13, 1998 8:12 AM Flag

    My assestment of the earnings report & C

    As always, rather than providing a complete
    reporting to viewers, CNBC reported what at first glance
    appear to be negatives. For instance, CNBC did not
    report that the charge related to Japan was an estimate.
    Instead, they reported in so many words that " BSX
    reported a huge loss and that it took a charge regading
    the accounting irregularities in Japan, yet it stated
    that the irregularities would not effect earnings."
    (By the way, Joe Kernan said that last night). He
    painted the most distorted negative picture possible.
    However the truth is "[t]he third quarter results include
    a $671 million ($524 million net-of-tax) charge to
    account for purchased research and development acquired
    in the $2.1 billion cash purchase of Schneider
    Worldwide. The results also include a charge for prior
    periods of $79 million ($53 million net-of-tax)
    representing management's estimate of net unrealizable assets
    related to the business irregularities detected in the
    operations of the Japanese subsidiary. Further, the third
    quarter results include a provision of $31 million ($21
    million net-of-tax) for costs associated with the
    Company's decision to voluntarily recall the NIR ON�Ranger�
    with Sox� coronary stent system in the United States."


    We first see that sales were excellent. Second, the
    cause of the loss was the huge charge related to
    Schneider Worldwide. Third, managements estimate for the
    Japanese irregularities. Fourth, a charge related to the
    NIR stent.

    Probably the most significant
    aspect of the report is sales. A big concern of
    everyone. They were excellent. As for the charges, the one
    for Schneider is acceptable when a business grows its
    business and the growth and success is evidenced in sales.
    Now the charge for Japan is an estimate, undoubtedly
    conservative. Realize BSX is going to generate in excess of $2
    billion in sales. This estimate is for $74 million. Its
    insignificant. Moreover, management appears to be confident that
    the irregularites are isolated to Japan, considering
    that Japan has a multitiered distribution system. No
    other country in the world in which BSX sells has such
    a system.

    In sum, if CNBC had noted the
    truth, all the pikers who sell today would undoubtedly
    have a profit in the long run. Be that as it may, I
    expect the stock to drop and emotion not fact. Hence,
    once I see the selling start to subside and
    institutions starts jumping in, I"m a buyer. Go luck to all us
    LONGS. Go BSX.

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    • Remember that they are a classic media
      orgaization, ad revenue based and thus bent on maximizing
      same. I state unequivocally that it is impossible for
      any organization so structured, to avoid bias that
      helps their topline. Bad news sells folks, it's an
      appeal to the morbid curiosity of the crowd. "Truth" is
      a malleable commodity, best relegated to the
      secondary role of keeping the publisher from publishing
      outright falsehoods.
      The old saw of "consider your
      source" might be worth reviewing, Kernan, IMHO, is the
      worst kind of hack trying to pass himself off as a
      competent professional. My discount factor on anything he
      spews is in excess of 50%.

      Ok, enough ranting,
      BSX is a buy according to the block trading
      community, see what they think about BSX and other stocks at
      www.blockdesk.com.

 
BSX
12.85+0.30(+2.39%)Jul 22 4:01 PMEDT

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