BOSTON - Costs from Boston Scientific Corp.'s $27 billion acquisition of Guidant Corp. nearly two years ago continue to erode the medical device maker's bottom line.
Boston Scientific swung to a $458 million fourth-quarter loss, as short-term costs from steps to reduce acquisition-related debt and cut jobs obscured an overall sales gain.
The Natick-based company said Monday that its net loss for the October-December period equaled 31 cents per share. In the same quarter a year earlier, Boston Scientific posted a profit of $277 million, or 19 cents per share.
Boston Scientific's sales rose 4 percent to $2.15 billion from $2.07 billion in the year-ago quarter, narrowly beating the consensus estimate of analysts surveyed by Thomson Financial, who expected sales of $2.13 billion in the latest quarter.
Excluding a total $939 million in charges, Boston Scientific posted a profit of $355 million, or 24 cents per share.
The biggest of the charges was a $365 million hit from estimated potential losses due to patent litigation involving stents, which help prop heart arteries open after surgery.
Boston Scientific also recorded charges of $208 million tied to businesses that the company recently sold and that are no longer worth as much they once were; $184 million in restructuring charges from the company's October announcement of plans to cut 2,300 jobs, or 8 percent of its work force; $174 million in amortization expense; and $8 million of additional acquisition-related charges.
Some of the recent asset sales that triggered the quarterly loss were part of a plan by Boston Scientific to reduce the hefty debt load the company was saddled with after the Guidant deal. The job cuts were part of a plan to cut operations costs by about $500 million this year.
"I don't think any of these charges was really surprising," said Jan Wald, a Stanford Group Co. analyst. "Cost-cutting hurts, but it is something the company had to do."
The total $939 million in charges from the latest quarter is up from $435 million in charges that Boston Scientific reported in last year's third quarter related to acquisitions and asset sales.
Sales of Boston Scientific's drug-coated stents totaled about $435 million in the fourth quarter, down 14 percent from $506 million in the year-ago quarter. Stent sales at Boston Scientific and a rival, Johnson & Johnson, have been hurt by research questioning the devices' safety and effectiveness, although some more recent studies have called some of the findings into question.
Sales of defibrillators and pacemakers, which Boston Scientific acquired in the Guidant deal, rose to $544 million from $489 million a year ago.
Wald said Boston Scientific didn't appear to lose a large share of the drug-coated stent market despite competition from new stents in Europe. And Boston Scientific's sales of cardiac rhythm devices did a little better than Wald projected.
"It sort of evened out," said Wald, who called Boston Scientific's quarter "positive."
The company said it expects to post first-quarter sales in a range of $1.96 billion to $2.08 billion — just below analysts' forecast for $2.09 billion. Boston Scientific expects a per-share profit of 15 cents to 20 cents, excluding one-time charges — above analysts' estimate of 12 cents a share.
Boston Scientific announced fourth-quarter and full-year results after its shares rose 48 cents, or nearly 4 percent, to $12.85 in regular trading. In after-hours trading, the stock tacked on 45 cents, for a gain of 3.6 percent, to $13.30.
The stock is trading above a five-year low of $10.76 set on Jan. 9 but is still worth only about half as much as it was before the Guidant deal in April 2006.
The company planned to discuss the fourth-quarter results in detail during a conference call with analysts Tuesday.
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