BOSTON - Costs from Boston Scientific Corp.'s $27 billion acquisition of Guidant Corp. continue to erode the company's bottom line, but Boston Scientific sees signs of turnarounds in two heart device markets.
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 medical device maker said after markets closed 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.
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.
Shares rose 8 cents to $12.77 Tuesday, above a five-year low of $10.76 set on Jan. 9, but only about half the price it fetched before the Guidant deal in April 2006.
Excluding $939 million in charges, Boston Scientific posted a profit of $355 million, or 24 cents per share.
The company recorded a $365 million charge for potential losses due to patent litigation involving stents, which help prop heart arteries open after surgery, and $208 million for businesses that the company recently sold.
Some recent asset sales are part of a plan by Boston Scientific to reduce debt left over from the Guidant acquisition.
"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."
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 have been hurt by research questioning the devices' safety and effectiveness compared with older bare-metal versions, although some recent studies have called those findings into question.
On a conference call with analysts Tuesday, Paul LaViolette, Boston Scientific's chief operating officer, cited indications that the drug-coated stent market "is heading in the right direction" after recent deterioration.
The proportion of U.S. stent procedures in which drug-coated models were used is about 63 percent, down from around 85 percent as recently as 2006, LaViolette said. But the precipitous drop early last year flattened in the year's final months, LaViolette said, and could be poised for a modest comeback in light of recent study data.
The market for defibrillators and pacemakers has recently been hurt by safety-related product recalls, but Jim Tobin, president and chief executive, said that market is "slowly recovering."
Sales of Boston Scientific's defibrillators and pacemakers, acquired in the Guidant deal, rose 11 percent to $544 million from $489 million a year ago.
The company 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.
For the full year, Boston Scientific forecasts a per-share profit of 79 cents per share to 80 cents, excluding one-time items.
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