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.
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.