Guidant Defibrillator Recall News
Boston Scientific Has Loss on Legal Expenses, Cuts
-Bloomberg
02/04/2008 - Boston Scientific Corp., the world's second-largest maker of heart devices, posted a loss on costs for legal expenses and job cuts. Sales rose more than analysts' estimated, boosting the shares in extended trading.
The fourth-quarter net loss was $458 million, or 31 cents a share, compared with profit of $277 million, or 19 cents, a year earlier, the Natick, Massachusetts company said today in a statement. Revenue rose 4.2 percent to $2.15 billion, helped by sales of defibrillators.
Chief Executive Officer James R. Tobin sold surgical units and eliminated jobs during the quarter to reduce expenses after sales of the company's heart stents, devices used to prop open arteries, slowed. Doctors shied away from the drug-coated Taxus stent after studies linked it to blood clots and heart attacks, instead favoring older, bare-metal versions.
``It looks like some of the company's market reorganization process is working for them,'' said Joanne Weunsch, an analyst with BMO Capital Markets in a phone interview today. The proof is in the higher-than-expected profit, strong defibrillator sales and ``reasonably good guidance'' for the first quarter, she said.
Boston Scientific rose 60 cents, or 4.7 percent, to $13.44 in extended trading at 5:26 p.m. New York time. The company gained 3.9 percent to $12.85 in New York Stock Exchange composite trading before the earnings were released.
Analysts' Estimates
Excluding $939 million in one-time expenses, Boston Scientific had a profit of 24 cents a share, beating the average 9-cent estimate of 12 analysts surveyed by Bloomberg. The costs included $365 million of estimated potential losses for patent litigation, $208 million in divestiture writedowns and $184 million in expenses associated with job cuts.
The company was projected to have sales of $2.13 billion in the fourth quarter, according to the average estimate of 15 analysts.
Boston Scientific forecast first-quarter earnings, excluding 2 cents of restructuring costs, of 15 cents to 20 cents a share. Twelve analysts in a Bloomberg survey had projected profit of 13 cents, on average. Sales will be in the range of $1.96 billion and $2.08 billion, the company said.
Worldwide sales of drug-coated stents dropped 14 percent to $435 million, while U.S. sales declined 32 percent to $224 million. The company expects its new Promus and Taxus Liberte stents to be approved by U.S. regulators this year, according to the earnings statement.
Defibrillator Sales
Sales of defibrillators, used to shock hearts into normal rhythm, rose 11 percent to $544 million in the quarter after rival Medtronic Inc., the world's biggest maker of heart-rhythm devices, recalled its Sprint Fidelis defibrillator wires in October following five patient deaths.
Boston Scientific entered the market for defibrillators when it spent $27.5 billion outbidding Johnson & Johnson for Guidant Corp. in April 2006. The previous year, Guidant recalled 109,000 faulty defibrillators linked to seven deaths, spurring lawsuits and leading to sanctions from the U.S. Food and Drug Administration.
In October, the company said it would eliminate 2,300 positions worldwide, or 13 percent of its non-manufacturing workforce.
If you or your loved one uses Guidant brand defibrillators, it is possible that you may experience problems with the device. If you have concerns about the recall consult with your doctor and then contact the Guidant defibrillator recall lawyers of Ennis & Ennis, P.A. for a free legal consultation.
