Niki Arrowsmith01.30.13
Thing are shaky in Natick, Mass., as Boston Scientific Corporation closes FY2012 with profits down and prepares for layoffs. The medtech firm saw a decline in sales, its net income down 44 percent to $60 million. Part of the decline can be blamed on the thousands of lawsuits the company is embroiled in over its transvaginal mesh devices.
A summary of the company’s 2012 Q4 results show that reported sales were $1.82 billion, down 1 percent from the corresponding quarter last year. The company achieved revenue growth of 14 percent and earned the clear number-two share position in the United States in neuromodulation, 10 percent in endoscopy and 9 percent in peripheral interventions. However, sales slipped in the interventional cardiology business, which sells heart stents, and in the cardiac rhythm management business, which sells pacemakers and implantable heart defibrillators. Those two businesses make up more than half of Boston Scientific’s total revenue. Combined revenue from the BRIC bloc (Brazil, Russia, India and China) grew 35 percent in the quarter. Also, the acquisition of Vessix Vascular Inc., a Laguna Hills, Calif. hypertension technology company was completed in the fourth quarter.
Though the results were not stellar, they still exceeded Wall Street predictions, which caused share price to rise this week.
“We are pleased but not satisfied with our improved performance in the quarter,” said Mike Mahoney, president and CEO. “We continued to enhance our growth portfolio, expand in the emerging markets, and implement operational changes to improve our execution and sharpen our customer focus. I am confident we are taking the critical steps that are needed to return our company to long-term growth.”
As a measure to recover from declining results, and ostensibly also to combat the new medical device excise tax, the company is expanding a restructuring program that originated in 2011. Of course, “restructuring” is most often code for “layoffs,” and Boston Scientific will cut 900 to 1,000 jobs this year bringing the total number of jobs cut since 2011 to approximately 2,200. According to the company, the measure is expected to reduce gross annual pre-tax operating expenses by an incremental $100 million to $115 million exiting 2013.
A summary of the company’s 2012 Q4 results show that reported sales were $1.82 billion, down 1 percent from the corresponding quarter last year. The company achieved revenue growth of 14 percent and earned the clear number-two share position in the United States in neuromodulation, 10 percent in endoscopy and 9 percent in peripheral interventions. However, sales slipped in the interventional cardiology business, which sells heart stents, and in the cardiac rhythm management business, which sells pacemakers and implantable heart defibrillators. Those two businesses make up more than half of Boston Scientific’s total revenue. Combined revenue from the BRIC bloc (Brazil, Russia, India and China) grew 35 percent in the quarter. Also, the acquisition of Vessix Vascular Inc., a Laguna Hills, Calif. hypertension technology company was completed in the fourth quarter.
Though the results were not stellar, they still exceeded Wall Street predictions, which caused share price to rise this week.
“We are pleased but not satisfied with our improved performance in the quarter,” said Mike Mahoney, president and CEO. “We continued to enhance our growth portfolio, expand in the emerging markets, and implement operational changes to improve our execution and sharpen our customer focus. I am confident we are taking the critical steps that are needed to return our company to long-term growth.”
As a measure to recover from declining results, and ostensibly also to combat the new medical device excise tax, the company is expanding a restructuring program that originated in 2011. Of course, “restructuring” is most often code for “layoffs,” and Boston Scientific will cut 900 to 1,000 jobs this year bringing the total number of jobs cut since 2011 to approximately 2,200. According to the company, the measure is expected to reduce gross annual pre-tax operating expenses by an incremental $100 million to $115 million exiting 2013.