By Susan Kelly
Feb 4 Boston Scientific Corp on Tuesday reported higher-than-expected quarterly results, citing improving demand for its devices that manage irregular heart rhythms.
But U.S. sales of implantable cardioverter defibrillators (ICDs), which shock dangerously fast heartbeats back to normal, were flat. Some analysts were looking for stronger sales of the important product after competitor St. Jude Medical Inc reported positive sales growth last month.
"There were some fits and starts in the quarter," said Jefferies analyst Raj Denhoy. "The U.S. ICD business was particularly light."
Investors have anticipated a recovery in the market for heart rhythm products after several years of declining sales. The U.S. economic downturn had reduced demand for healthcare, and medical studies suggested the devices have been overused.
Boston Scientific is also expected to benefit from the introduction of its S-ICD system. The "lead wires" in this new type of implantable defibrillator are threaded up the sternum rather than attached to the heart.
Boston Scientific last year began to see growth in revenue, which had been falling for years, after the company embarked on a turnaround strategy involving cost cuts and restructuring efforts.
In the fourth quarter, Boston Scientific's profit rose to $108 million, or 8 cents a share, from $60 million, or 4 cents a share, a year earlier.
Excluding acquisition, divestiture, litigation and restructuring charges, earnings were 21 cents a share. Analysts on average had expected 13 cents, according to Thomson Reuters I/B/E/S.
Sales rose 1 percent to $1.84 billion, while analysts had forecast $1.83 billion.
Worldwide sales of cardiac rhythm management products, including pacemakers and ICDs, climbed 2 percent to $468 million in the fourth quarter.
Sales of interventional cardiology products, primarily stents that are inserted into clogged heart arteries to help prop them open, fell 6 percent to $500 million.
Boston Scientific forecast 2014 earnings of 75 cents to 80 cents a share, excluding special items, on revenue of $7.3 billion to $7.5 billion.
Analysts on average were expecting a profit of 52 cents a share on revenue of $7.41 billion.
Shares of Boston Scientific more than doubled last year on anticipation of a recovery in the heart rhythm device market and enthusiasm about the company's product pipeline.
The stock was down 0.3 percent at $12.97 in midday trading on the New York Stock Exchange.