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Weighing in with Boston Scientific’s 4Q15 Revenues

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EPS estimates

Boston Scientific Corporation (BSX) reported its 4Q15 earnings on February 4, 2016. The company registered adjusted EPS of $0.26 in 4Q15, representing an 18% YoY (year-over-year) growth and exceeding the guidance range of $0.23–$0.25. The company’s full-year adjusted EPS came to around $0.93, representing an 11% YoY growth.

4Q15 EPS

As the graph above shows, Boston Scientific’s actual EPS of $0.26 in 4Q15 exceeded Wall Street analyst estimates of $0.25. Although approximately $0.03 of unfavourable currency impact weighed down the 4Q15 adjusted EPS to an extent, the company reported strong EPS growth, driven primarily by solid revenues and margin expansion. The currency impact for the quarter as well as for the full year was more pronounced than the company expectations. The fiscal 2015 negative impact of foreign exchange was $0.1, compared to the expected $0.2 by the company.

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Revenue estimates

In 4Q15, the company earned revenues of ~$1.98 billion, registering a rise of around 4.8% on a YoY basis. These revenues were in line with the company’s guidance of about 1.97–2.01 billion. On an operational basis, revenues grew by approximately 10%. Currency headwinds negatively impacted revenues by $110 million, which was $25 million higher than the 4Q15 guidance provided by Boston Scientific with its 3Q15 earnings release. Moreover, the 4.8% growth in revenues excludes the revenues earned through AMS urology portfolio.

4Q15 revenues

As the graph above shows, Boston Scientific’s actual revenues in 4Q15 missed Wall Street analyst estimates. Although sales were significantly impacted by currency headwinds, meaningful innovation and the company’s changes to its business model are now targeting value-based products and services, which should continue to drive Boston Scientific’s business. The company exhibited strong sales in all business segments, except the decline of 1% in Cardiac Rhythm Management sales. Peripheral Interventions sales exhibited strong growth of approximately 10% in the quarter ending December 31, 2015.

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BSX’s peers and what to expect from this series

Boston Scientific’s peers such as Abbott Laboratories (ABT), St. Jude Medical (STJ), and Baxter (BAX) are expected to earn revenues of about $4.8 billion, $1.6 billion, and $2.4 billion, respectively, for the quarter ending March 31, 2016. Investors can gain diversified exposure to Boston Scientific Corporation by investing in the SPDR S&P 500 ETF (SPY). Boston Scientific accounts for about 0.13% of SPY’s total holdings.

Keep reading this series for a comprehensive and up-to-date analysis of Boston Scientific’s 4Q15 results and outlook going forward. We’ll look at the company’s recent stock performance, sales estimates and guidance for 2016, analyst recommendations, and current valuation, offering in-depth interpretations of these financials throughout.

Let’s start with the market reaction to Boston Scientific’s results.

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