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Boston Scientific (BSX) Watchman FLX Sales to Aid Q2 Earnings

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Boston Scientific Corporation BSX is scheduled to report second-quarter 2021 results on Jul 27, before the opening bell.

In the last reported quarter, the company’s earnings per share of 37 cents exceeded the Zacks Consensus Estimate by 23.33%. It beat estimates in three of the trailing four quarters and missed in one. The trailing four-quarter average earnings surprise was 86.38%.

Factors at Play

Top-line growth in the second quarter is likely to have improved sequentially with Boston Scientific appropriately investing in virtual physician education, remote clinical support and digital sales enablement, suitable for healthcare support amid the pandemic. Per the company’s May update, with all these, it has already seen strong procedure recovery and market share gains across many of the businesses and regions.

On a geographic basis, in Q2, every market in Asia is expected to have grown despite COVID-19 related uncertainties. In Japan and China, new product launches are expected to have contributed to the company’s top line this time. Despite the ongoing negative impact of tender pricing for drug-eluting stents and balloons, China is expected to report solid results banking on strong momentum of Complex PCI and imaging products, as well as Endoscopy, Urology and Peripheral Interventions (PI) lines.

Within Interventional Cardiology (IC) business, after grappling with WATCHMAN FLX conversion-related issue, which hurt the top line in the previous quarters, the company noted that the accounts in the United States were over 90% converted to FLXin the first quarter. WATCHMAN FLX received positive physician feedback on device performance and safety, a higher-than-expected conversion rate and a shift to a consignment model. This should have strongly contributed to the company’s Q2 top line.

Boston Scientific Corporation Price and EPS Surprise

Boston Scientific Corporation Price and EPS Surprise
Boston Scientific Corporation Price and EPS Surprise

Boston Scientific Corporation price-eps-surprise | Boston Scientific Corporation Quote

The company had initiated a global, voluntary recall of all unused inventory of the LOTUS Edge Aortic Valve System. Although there will be no material charges related to LOTUS discontinuation in 2021, there will be a loss of $62 million in LOTUS Edge sales this year. This is likely to be reflected in the second-quarter results.

Within coronary therapies, drug-eluting stents continued to be a challenge from a pricing standpoint. However, new product launches, such as SYNERGY XD and MEGATRON, are expected to have contributed to the top line.

Within the Peripheral Interventions (PI) business, second-quarter sales are expected to be more resilient to the pandemic, banking on favorable mix of high acuity and outpatient site of care for procedures, as well as a category-leading portfolio and strong cadence of new product launches. Interventional Oncology is expected to have gained from strong momentum in TheraSphere.

Within Urology/ Pelvic Health, sales from the company’s LithoVue, SpaceOAR and Rezum product lines are expected to have been better. Boston Scientific continues to expect urology/ pelvic health to have one of the faster potential recovery curves, aided by a higher office ASE mix for most elective procedures.

Within Endoscopy, broad-based recovery across regions and growing strength in infection prevention are expected to have driven revenues in Q2.

Within Neuromodulation, the company is expected to have registered balanced procedure recovery across RF (radiofrequency), Vertiflex and Spinal Cord Stimulation, banking on strong execution of category leadership strategy in pain. Further, the launch of the next-gen WaveWriter Alpha SCS system is expected to have boosted the top line.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter total revenues of $2.94 billion suggests improvement of 46.9% from the prior-year reported number. The consensus mark for adjusted earnings of 37 cents per share implies 362.5% rise from the year-ago reported figure.

What Our Quantitative Model Predicts

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is however not the case as you can see below.

Earnings ESP: Boston Scientific has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Boston Scientific carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this time around.

Hill-Rom Holdings, Inc. HRC currently has an Earnings ESP of +0.56% and a Zacks Rank #2. The stock is slated to release its third-quarter fiscal 2021 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Henry Schein, Inc. HSIC has an Earnings ESP of +0.91% and a Zacks Rank of 2, at present. The stock is expected to release its second-quarter 2021 results on Aug 3.

Laboratory Corporation of America Holdings LH has an Earnings ESP of +6.53% and a Zacks Rank of 2, at present. The company is scheduled to release its second-quarter 2021 results on Jul 29.

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