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Will Boston Scientific or Abbott Report Higher Margins?

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Feb. 21 2019, Updated 9:00 a.m. ET

Margin guidance

In the company’s fourth-quarter earnings conference call, Boston Scientific (BSX) has guided for an adjusted gross margin of 72%–73% for fiscal 2018, assuming the favorable impact of 40 basis points attributable to foreign exchange. The company has also forecasted adjusted gross margin of 72%–73% for the first quarter of 2019.

According to the company’s fourth-quarter earnings conference call, Boston Scientific has forecasted an adjusted operating margin of 25%–26% and 26%–26.5% for the first quarter of 2019 and fiscal 2019, respectively. The company’s operating margin projections for fiscal 2019 imply a YoY improvement of 50–100 basis points and are in line with the company’s adjusted operating margin forecast of 30% plus for years beyond fiscal 2020.

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According to the fourth-quarter conference call, Abbott Laboratories (ABT) expects to benefit from the underlying improvement in gross margins for its businesses and report overall adjusted gross margin of 58.5% and 59.5% for the first quarter and for fiscal 2019, respectively. The company is focused on improving its margins by capturing synergies from the acquisitions of St. Jude and Alere’s Rapid Point-of-Care Diagnostics’ business. Boston Scientific is expected to report higher gross margin as compared to Abbott Laboratories in fiscal 2019.

Wall Street projections

Wall Street analysts have projected Boston Scientific’s gross margins to be 72.58%, 72.82%, and 73.06%, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively. These estimates imply YoY growth of 31 basis points, 24 basis points, and 24 basis points for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

Wall Street analysts have projected Abbott Laboratories’ gross margins to be 59.55%, 59.90%, and 60.14%, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies YoY growth of 20 basis points, 35 basis points, and 24 basis points for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

Next, we’ll discuss the recent and proposed product launches for Boston Scientific.

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