October 24, 2018 / 11:01 AM / 9 months ago

Surgical product sales drive Boston Scientific's profit beat

(Reuters) - Medical device company Boston Scientific Corp (BSX.N) posted a slightly better-than-expected quarterly profit on Wednesday, helped by higher sales in its MedSurg business, which makes surgical products for various urological and pelvic disorders.

Boston Scientific, whose key cardiovascular unit reported lower-than-expected revenue for the third quarter, has been entering into several smaller, tuck-in deals in an attempt to diversify its portfolio.

The company last week completed its acquisition of Augmenix Inc, which makes injectable gels to reduce the side effects of radiation treatment for prostate cancer.

The company’s biggest revenue contributor - the cardiovascular unit that makes heart valves and stents - posted a 6 percent increase in sales to $908 million, but missed the average analyst estimate of $923 million.

The unit’s revenue miss comes a day after rival Edwards Lifesciences (EW.N) posted lower-than-expected heart valve sales due to weakness in Europe.

The fast-growing MedSurg business brought in 10.4 percent higher revenue of $746 million in the third quarter, ahead of analysts’ expectations of $735.5 million, according to Refinitiv data.

The company’s shares rose about 2 percent to $36.68 in early trading.

Boston Scientific tightened its adjusted earnings per share forecast for 2018 to a range of $1.38 to $1.40 per share, taking into account a 4-5 cent negative impact from foreign exchange rates.

“Investors would have liked to see EPS guidance move higher but foreign exchange was a greater headwind than expected,” JP Morgan analyst Robert Marcus told Reuters.

The company also lowered its full-year revenue forecast to $9.79 billion to $9.83 billion, from $9.80 billion to $9.88 billion.

“While foreign exchange continues to be a headwind for us in 2018, we believe that if rate holds constant, foreign exchange should become relatively neutral for our EPS in 2019,” Chief Financial Officer Daniel Brennan said on a post-earnings call.

The company’s net income jumped about 53 percent to $432 million, or 31 cents per share, in the quarter ended Sept. 30.

Excluding items, it earned 35 cents per share, edging past Refinitiv estimates of 34 cents.

Net sales, which include a $31 million headwind from foreign exchange, rose to $2.39 billion, missing estimates of $2.40 billion.

Reporting by Saumya Sibi Joseph and Tamara Mathias in Bengaluru; Editing by Maju Samuel

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