Maybe it's a bit of both.
Regardless of the source, the result was the same: a bottom-line boost to Boston Scientific Corp.'s second-quarter earnings. The Marlborough, Mass.-based device behemoth reported net earnings per share (EPS) of $102 million or 8 cents per share for the three months ended June 30, sharply higher than $4 million or breakeven per share rate in the prior-year quarter. Results for Q2 included intangible asset impairment charges, acquisition- and divestiture-, restructuring-, and debt extinguishment charges, and amortization expenses of 14 cents per share.
Excluding certain items, adjusted EPS for the quarter was $294 million or 22 per share, compared to $285 million or 21 per share in Q2 2014. The adjusted rate was a penny higher than analysts' expectations.
"Our strong performance in the second quarter reflects the consistent execution of our global teams," President/CEO Mike Mahoney said. "We are particularly pleased with the improved growth in MedSurg and continued strength in Cardiovascular. We look forward to continued momentum with several ongoing product launches and the planned closing of the American Medical Systems (AMS) urology portfolio acquisition in the third quarter of 2015."
Net sales for the quarter fell 2 percent to $1.84 billion, from $1.87 billion in the same quarter last year. Twenty-two Wall Street analysts had consensus revenue estimates of $1.83 billion for the quarter.
Boston Scientific recorded operational revenue growth of 6 percent across all three major regions (U.S., Europe, and Asia, Middle East and Africa) and 12 percent operational revenue growth in emerging markets (Brazil, Russia, China, India). Mahoney said it was at least the fourth consecutive quarter of constant-currency revenue growth of 6 percent, and it occurred as the result of rollouts of new products. Those include the closely scrutinized Watchman stroke-prevention device that seals off the heart’s left atrial appendage, and the European launch of Lotus, Boston Scientific’s transcatheter aortic valve replacement system.
The company's SpyGlass DS endoscope --- launched in the first quarter --- fuled a 6 percent year-over-year increase in quarterly endoscopy sales (excluding the negative effect of foreign currency exchange rate fluctuations) to $326 million, as did the Axios Stent System from Xlumema, a minimally invasive device maker acquired in early April for $75 million. Endoscopy is part of Boston Scientific's MedSurg unit, which reported a 7 percent rise in (constant currency) sales to $583 million. Urology and women's health, and neuromodulation revenue both had a solid quarter, growing 7 percent and 9 percent, respectively, to $135 million and $122 million.
The cardiovascular devices division grew sales by 10 percent to $743 million in the second quarter, with interventional cardiology revenue rising 7 percent (in constant currency) to $515 million and peripheral interventions jumping 16 percent to $228 million.
Heart-rhythm management devices like pacemakers and defibrillators declined by 1 percent to $460 million, becoming the only company division to show a drop compared with the same period last year. Electrophysiology device proceeds rose 9 percent to $57 million. Mahoney predicted rhythm-management sales should pick up again with the U.S. launch of products including the Emblem, an implantable defibrillator that does not require leads touching the heart.
In the third quarter, the company expects adjusted earnings to range between 21 cents and 23 cents per share, on projected revenues between $1.79 billion and $1.84 billion. Analysts expect the company to report earnings of 23 cents per share on quarterly revenues of $1.84 billion.
Wall Street analysts are expecting full-year 2015 earnings to reach 90 cents per share on annual revenues of $7.34 billion.