Can IC and PI Arms Drive Boston Scientific (BSX) Q1 Earnings?
Boston Scientific Corporation BSX is scheduled to report first-quarter 2020 results on Apr 29, before the opening bell.
In the last reported quarter, the company’s earnings per share exceeded the Zacks Consensus Estimate by 4.55%. It delivered a positive surprise in three of the trailing four quarters and missed in one, the average beat being 1.76%.
On Apr 2, the company announced its preliminary estimated revenue growth range for the first quarter. The company noted that with healthcare systems responding to the increasing demand for COVID-19-related support, elective procedures have been delayed.
The company noted that during the first two months of the quarter, the business trends were in line with its expectations. However, since the beginning of March, when coronavirus took the shape of a pandemic, procedural volumes significantly declined. Subsequently, the company expects first-quarter 2020 reported revenue growth in the range of approximately flat to slightly up from the prior-year period. On an organic basis, the company’s revenues declined 2-3% per the preliminary announcement.
Factors at Play
Boston Scientific, which has a strong global base, 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 and postponement of non-COVID 19 healthcare activities). This might have hurt its quarterly revenues.
Boston Scientific Corporation Price and EPS Surprise
Boston Scientific Corporation price-eps-surprise | Boston Scientific Corporation Quote
Let’s see how Boston Scientific’s Cardiovascular business, comprising Interventional Cardiology (IC) and Peripheral Interventions (PI), otherwise progressed in the first quarter.
We are once again optimistic about the IC business, which is likely to have helped the company maintain an impressive global growth momentum in the first half of the first quarter, courtesy of an innovative portfolio and robust commercial teams across structural heart and coronary therapies. Complex PCI (percutaneous coronary intervention) products within IC have been gaining traction from successful global expansion efforts.
Within IC, the company has been demonstrating consistent strength in structural heart with WATCHMAN, ACURATE, SENTINEL and complex PCI and PCI guidance portfolios.
In the recent quarters, the PI business has demonstrated a solid uptrend across segments like peripheral arterial disease, venous and interventional oncology. The unveiling of Vici Venous Stent in the United States and Eluvia DES globally has been a positive.
Further, with the BTG integration going on, the consolidated entity is expected to have been accretive to the first-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 first-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.
Q1 Estimates
The Zacks Consensus Estimate for first-quarter total revenues of $2.63 billion suggests growth of 5.6% from the prior-year reported number. The consensus mark for earnings of 34 cents per share implies 2.9% 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 -5.6%. 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.
Exact Sciences Corporation EXAS currently carries a Zacks Rank of 2 and has an Earnings ESP of +26.79%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aphria Inc. APHA carries a Zacks Rank of 2 at present and has an Earnings ESP of +35.71%.
DexCom, Inc. DXCM is a Zacks #2 Ranked stock with an Earnings ESP of +143.90%.
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