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Deferred Procedures to Mar Boston Scientific (BSX) Q2 Earnings

Zacks Equity Research
·4 min read

Boston Scientific Corporation BSX is scheduled to report second-quarter 2020 results on Jul 29, before the opening bell.

In the last reported quarter, the company’s earnings per share lagged the Zacks Consensus Estimate by 15.15%. It beat estimates in three of the trailing four quarters, the average negative surprise being 1.34%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

The second quarter is expected to have been dreadful for Boston Scientific given continuation of lockdown. In June, at the Jefferies conference, the company noted that the impact of COVID-19 on its business was similar across Western Europe and the United States. Both regions witnessed mass deferring of elective procedures in hospitals and postponement of non-COVID 19 healthcare activities. Though a bit delayed, the case was same in Japan too.

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

Further, with such a huge global base, the company is expected to have witnessed a notable reduction in product demand across its core business segments (due to the massive disruption in the global supply chain). This might have significantly hurt its quarterly revenues.

The company expects second-quarter 2020 reported revenues to be hurt the most by COVID-19.

Let’s see how Boston Scientific’s Cardiovascular business, comprising Interventional Cardiology (IC) and Peripheral Interventions (PI), otherwise progressed in the second quarter.

Within IC business, as stated by the company earlier, April sales trended down about 40% from the year-ago period with structural heart sales impacted more, reflecting a higher mix of deferrable procedures. However, coronary therapy sales were more resilient with less-deferrable procedures.

Within the PI business,April sales were down 30% on an estimated mix of deferrable and non-deferrable procedures ranges. The company arranged Arterial, Venous and Interventional Oncology, in order of highest to lowest mix of deferrable procedures.

Further, with the BTG integration going on, the consolidated entity is expected to have been strongly accretive to the second-quarter top line. BTG has three primary businesses, of which Interventional Medicine portfolio, including various PI product lines, is the largest. In the last-reported quarter, the Interventional Medicine business performed in line with expectations with strong growth in Interventional Oncology. The second-quarter results are expected to reflect similar global organic growth trends in PI driven by successful integration synergy and new product approvals such as Ranger DCB.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter total revenues of $1.62 billion suggests decline of 38.5% from the prior-year reported number. The consensus mark for loss of 5 cents per share implies 112.8% decline from the year-ago reported figure.

What Our Quantitative Model Predicts

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

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 #3.

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.

Integra LifeSciences Holdings Corporation IART has an Earnings ESP of +25.00% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exact Sciences Corporation EXAS has an Earnings ESP of +6.45% and a Zacks Rank of 2 at present.

IDEXX Laboratories IDXX has an Earnings ESP of +17.65% and is a Zacks #2 Ranked stock.

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