Boston Scientific’s Adjusted Operating Margins



Margin guidance for fiscal 2018

Boston Scientific (BSX) expects to report adjusted operating margins of 25.5%–25.75% for fiscal 2018, which is consistent with the company’s 2020 adjusted operating margin target of 28%.

The above diagram highlights the expected growth trajectory for Boston Scientific’s adjusted operating margins until 2020 and beyond.

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Second-quarter guidance

Boston Scientific expects to report total revenues of $2.45 million–$2.50 million in the second quarter, which implies YoY (year-over-year) organic revenue growth of 5%–7%. The company also expects its operational revenue growth to increase by 70 basis points following the Symetis acquisition and an advantage of $60 million–$70 million from favorable currency fluctuations. Based on these assumptions, the company is expected to report YoY revenue growth of 9%–11% in the second quarter.

In the second quarter, Boston Scientific expects to witness an adjusted gross margin and adjusted operating margin of 71.5%–72% and 25.25%–25.75%, respectively. The company has projected its adjusted selling, general, and administrative expenses as a percentage of sales and adjusted research and development expenses as a percentage of sales to be 34.5%–35.5% and 10%–11%, respectively. The company has estimated the adjusted tax rate for the second quarter to be 14%–15%.

Finally, the company expects its second-quarter adjusted EPS to be $0.33–$0.35, which would imply YoY growth of ~3%–10%. Excluding the negative impact of foreign currency fluctuations which will be worth $0.00–$0.01, the company expects to witness YoY growth of 5%–11% in its adjusted EPS in the second quarter.

In the second quarter, Wall Street analysts expect Zimmer Biomet Holdings (ZBH), Abbott Laboratories (ABT), and Baxter International (BAX) to report an adjusted EPS close to $1.9, $0.7, and $0.7, respectively.


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