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What's in Store for Boston Scientific's (BSX) Q2 Earnings?

Zacks Equity Research

Boston Scientific Corporation BSX is scheduled to report second-quarter 2019 results on Jul 24, before the opening bell.

In the last reported quarter, the company’s earnings per share missed the Zacks Consensus Estimate by 2.78%. However, it delivered positive earnings surprises in three of the trailing four quarters, the average being 6.54%.

Let’s see, how things are shaping up prior to this announcement.

Key Catalysts

We are upbeat about solid contributions from Boston Scientific’s Cardiovascular business group, which comprises Interventional Cardiology (IC) and Peripheral Interventions (PI).

Interventional Cardiology

We are optimistic about the IC business, which will help the company maintain impressive global growth, courtesy of an innovative portfolio and robust commercial teams. Complex PCI (percutaneous coronary intervention) products within IC are growing strongly on the back of successful global expansion efforts.

Boston Scientific Corporation Price and EPS Surprise

 

Boston Scientific Corporation Price and EPS Surprise

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

Within IC, the company is demonstrating continued strength in structural heart with WATCHMAN, ACURATE, SENTINEL, and complex PCI and PCI guidance portfolios. The ACURATE TAVR valve platform has emerged as the fastest growing valve in Europe and registered nearly 30% growth in the last reported quarter. We expect these upsides to contribute to the company’s top line in the upcoming quarterly results.

More specifically, the company is highly optimistic about the IC sub-segment’s performance in the second quarter, banking on its recent launches. In this regard, Boston Scientific received a CE Mark in March and initiated a market launch of the next-generation WATCHMAN FLX Left Atrial Appendage Closure (LAAC) Device in Europe in the same month. It also received a Japanese approval of WATCHMAN during the quarter. The company expects to witness consistent growth in WATCHMAN in the upcoming quarters, riding on the rising adoption and expanding international footprint of the device.

Strong uptick by complex coronary products, the launch of Promus ELITE, the FDA approval of the Vici Viniti stent in May 2019 and the continued momentum of the structural heart portfolio are expected to drive growth for the IC sub-segment in the to-be-reported quarter.

The company’s initiation of a controlled commercial launch of LOTUS Edge in Europe in the first quarter is also expected to benefit its upcoming quarterly results.

The Zacks Consensus Estimate for IC revenues is pegged at $705 million, indicating an increase of 6.5% from the year-ago quarter’s reported figure.

Peripheral Interventions

In recent quarters, the PI business steadily demonstrated a solid uptrend across segments like peripheral arterial disease, venous and interventional oncology. This was led by the Eluvia DS launch in the United States and double-digit growth in interventional oncology. We anticipate this trend to continue in the to-be-reported quarter.

Per Boston Scientific, Eluvia has a substantial market potential, owing to the large addressable patient population; a differentiated, sustained-release technology; and the superior clinical outcomes with reduced need for reintervention. We believe, this launch to be accretive to the company’s second-quarter results.

However, Boston Scientific expects slower adoption of Eluvia in the United States and Europe in the second quarter due to ongoing Paclitaxel concerns. Although, in June’s FDA Advisory Committee panel meeting, the company presented updated clinical data affirming the safety of Paclitaxel and the Eluvia stent, any chance of immediate recovery from that situation is bleak.

The Zacks Consensus Estimate for first-quarter PI revenues stands at $319 million, suggesting a 4.9% rise from the prior-year quarter’s reported figure.

Other Factors at Play

Among the other segments, MedSurg is expected to demonstrate a stable performance, led by endoscopy, in the to-be-reported quarter. Urology and Pelvic Health segment is also projected to surpass the market levels, driven by investment strategies in key international geographies.

Within endoscopy, the company is expected to deliver sturdy results, driven by a promising performance in its hemostasis franchise in infection prevention and strong pathology.

Urology and Pelvic Health business should also maintain momentum on the back of a robust global performance in the second quarter. 

Within neuromodulation, of late, the company is registering strong growth in the United States, led by robust performance of the WaveWriter Spinal Cord Stimulation and the Vercise Deep Brain Stimulation platforms. This trend is expected to continue in the to-be-reported quarter.

Boston Scientific’s recent acquisitions added several products with immense growth potential to its portfolio. Within the pain management portfolio, the company’s recent acquisition of Vertiflex Inc is expected to significantly contribute to the top line in the second quarter.

The company is gradually fortifying its presence in the emerging markets of Brazil, Russia, India and China (BRIC). It is currently targeting about 10 emerging markets to expand its footprint. The company is also pinning hopes on its core cardiology segment, which is gradually attaining stability with growth in the BRIC nations.

Which Way Are Estimates Treading?

The Zacks Consensus Estimate for total revenues of $2.64 billion suggests growth of 5.9% from the prior-year quarter’s reported figure. Also, the consensus mark for earnings of 38 cents indicates a 7.32% decline from the year-ago quarter's reported figure.

What Our Quantitative Model Predicts

Per our model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has high chances of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Boston Scientific has a Zacks Rank #3, which increases the predictive power of ESP. However, the company has an Earnings ESP of 0.00%, which makes surprise prediction inconclusive.

Stocks Worth a Look

Here are a few medical stocks worth considering, as these have the right combination of elements to post earnings beat this quarter.

AmerisourceBergen ABC has an Earnings ESP of +0.67% and a Zacks Rank #2.

DENTSPLY SIRONA XRAY has an Earnings ESP of +6.95% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amedisys, Inc. AMED has an Earnings ESP of +1.91% and a Zacks Rank #1.

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