Boston Scientific Sees Slowdown
Of Sales Growth for Next Year
An INTERACTIVE JOURNAL News Roundup
December 15, 1999
NATICK, Mass. -- Boston Scientific Corp. said it expects sales growth to slow sharply in 2000 amid growing competition and delayed approvals for its medical devices.
Sales are expected to rise just 8% to $3.06 billion in 2000 from this year, Chief Financial Officer Larry Best said Wednesday. That would put this year's sales at $2.83 billion, a 27% advance over 1998. The company has reported annual sales growth of about 20% for the past 20 years.
The medical-device company also set an earnings goal for the year of $1.20 a share.
Analysts surveyed by First Call/Thomson Financial already had lowered the estimate for 2000 earnings to $1.21 a share after the company said in October that Wall Street forecasts were "too aggressive." Before the warning, analysts had expected the company to earn $1.29 a share.
"We are not happy with not delivering double-digit growth," Mr. Best said Wednesday. "But I think we are confident that developments in pipeline can return Boston Scientific to double-digit growth."
Boston Scientific, best known as a manufacturer of stents, has enjoyed a demanding market for the small wire-mesh tubes used to prop open clogged arteries, but Wall Street analysts expect the market to slow and competition from stent-market rivals Medtronic Inc. and Guidant Corp. to increase.
Delayed product rollouts also have hampered sales.
A wave of new stents initially was slated to be released before the end of the year, but Boston Scientific's chief executive, James Tobin, told investors that personnel changes at the U.S. Food and Drug Administration have slowed the approval process.
Boston Scientific's plans to release the Nir Advance stent this year were pushed back until the first quarter of 2000. The Nir-Sox is expected to be relaunched in the second quarter, followed by a third-quarter release the Nir Royale Elite. The company warned that product releases will make it difficult to maintain margins.
Recalls also have set the company back. In August, Boston Scientific recalled two arterial-plaque-removing devices after learning of three cases in which the drill-like instruments malfunctioned.
The recall was accompanied by an eight-cent-per share reduction in the company's own estimate for its 1999 earnings. The redesigned Rotablator RotaLink received Food and Drug Administration approval Monday.
The company earned $55 million, or 13 cents a share, on revenue of $691 million in the third quarter, swinging to a profit from a year earlier on increased sales of angioplasty devices and cost-cutting measures. The company lost $462 million, or $1.18 a share, on revenue of $576 million in the third quarter of 1998.
Boston Scientific said 2000 will be a year of "continued development," in which it will focus on cost efficiencies and an accelerated pace of product innovation.
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