Tags: BSX | restructures | medical | stocks

Boston Scientific Restructures, Invests

By Mike Seemuth   |   Thursday, 04 Aug 2011 12:06 PM

Boston Scientific (BSX) is an international maker of medical devices for heart disease that may be recovering from a financial illness of its own making. Boston Scientific appears on track to end a long series of annual losses this year by earning a profit amid a restructuring of its operations.

The company reported net income of $192 million in the first half of the year, reversing a net loss of $1.49 billion in the same period last year. The Natick, Mass. company guided investors in July by estimating earnings per share of between 22 cents and 30 cents this year. The company lost 70 cents per share last year.

The developer, manufacturer, and marketer of medical devices has reported a net loss in each of the last five years, accumulating losses totaling $8.19 billion in the 2006 to 2010 period.

Among the company's best-selling products are implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities; implantable pacemakers that manage slow or irregular heart rhythms; coronary stents that prop open arteries; and catheters that remove arterial obstructions.

But the company's financial results haven't matched its impressive medical technology. Operating expenses have been coming down, yet the top line of the income statement has been troubling: Net sales totaled $7.81 billion last year, almost unchanged from $7.82 billion in 2006.

Boston Scientific is trying to clamp down even harder on costs by conducting a restructuring program that will eliminate up to 1,400 jobs at the company by the end of 2013. At the same time, management is investing in business opportunities in emerging markets such as Brazil, China, and India.

Credit rating upgrade

Most analysts who follow Boston Scientific had neutral ratings on the stock in early August. But the company's creditors are more optimistic.

Fitch Rating analysts upgraded Boston Scientific's unsecured bank credit facility, senior unsecured notes, and issuer default rating, each to BB+ from BBB-, an action that applies to $4.9 billion of debt.

"The rating action is supported by the company's steady pay-down of debt and its increasingly stable operations," Fitch analysts Rob Kirby and Michael Zbinovec wrote in a July 21 report. The company next reports earnings on Oct. 17.

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Boston Scientific (BSX) is an international maker of medical devices for heart disease that may be recovering from a financial illness of its own making. Boston Scientific appears on track to end a long series of annual losses this year by earning a profit amid a...
BSX,restructures,medical,stocks
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2011-06-04
 

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