Boston Scientific’s top line
In Q1 2018, Boston Scientific (BSX) generated sales of $2.4 billion compared to $2.2 billion in Q1 2017. For fiscal 2018, fiscal 2019, and fiscal 2020, revenues are expected to be $9.8 billion, $10.5 billion, and $11.2 billion, respectively.
The company’s cost of goods sold increased from $650 million in Q1 2017 to $672 million in Q1 2018. Its gross profit increased from $1.5 million in Q1 2017 to $1.7 million in Q1 2018. The increase was due to the positive impact of cost reductions from Boston Scientific’s process improvement programs and restructuring programs.
Boston Scientific’s selling, general, and administrative expenses increased from $794 million in Q1 2017 to $860 million in Q1 2018. As a percentage of revenues, that was a reduction from 36.8% in Q1 2017 to 36.1% in Q1 2018, primarily due to the benefits of its targeted initiatives of end-to-end business process streamlining and automation, expansion of global shared services, and leveraging global sourcing.
Research and development expenses increased from $235 million in Q1 2017 to $261 million in Q1 2018. As a percentage of revenues, research and development expenses were nearly flat at 11% in Q1 2018 compared to 10.9% in Q1 2017. Royalty and amortization expenses in Q1 2018 were nearly flat at $18 million and $141 million, respectively, compared to $17 million and $143 million, respectively, in Q1 2017.
The company’s total operating expenses increased from $1.1 billion in Q1 2017 to $1.3 billion in Q1 2018. Its operating income increased from $364 million in Q1 2017 to $407 million in Q1 2018.
Boston Scientific’s interest expenses increased from $57 million in Q1 2017 to $61 million in Q1 2018. Its net income increased from $290 million in Q1 2017 to $298 million in Q1 2018. That translated to a net income per share of $0.21 in Q1 2018, which was the same as Q1 2017.
In the next part of this series, we’ll take a look at Boston Scientific’s cash flows.