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Boston Scientific Reiterates Its SG&A Expense Guidance for 2019

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Apr. 29 2019, Published 11:20 a.m. ET

SG&A expense guidance

On its first-quarter earnings conference call, Boston Scientific (BSX) reiterated its 2019 SG&A (selling, general, and administrative) expense-to-sales percentage of 34.5%–35%, a YoY (year-over-year) rise of 40–90 basis points. The company guided for a slightly higher 2019 SG&A ratio than its first-quarter SG&A ratio mainly on account of the $25 million worth of nonrecurring litigation-related benefits it reported in the first quarter. These litigation benefits also involved part of a $180 million payment made by Edwards Lifesciences to settle ongoing patent disputes.

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In the first quarter, Boston Scientific reported adjusted SG&A expenses of $855 million, which accounted for 34.3% of the company’s total sales and was down 120 basis points YoY. According to the company’s first-quarter earnings conference call, it managed to report a superior SG&A-to-sales ratio to its guidance of 35%–36% mainly due to cost-optimization initiatives and a nonrecurring benefit from its litigation-related settlement.

Wall Street projections

Analysts expect Boston Scientific’s SG&A-to-sales percentage to see YoY falls of 74 basis points to 34.63% in 2019, 58 basis points to 34.05% in 2020, and 61 basis points to 33.44% in 2021. Analysts also expect the company’s SG&A-to-sales percentage to rise 27 basis points YoY to 35.01% in the second quarter but to fall 93 basis points YoY to 34.55% in the third quarter and 119 basis points YoY to 34.54% in the fourth quarter of 2019.

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