Will Boston Scientific (BSX) Beat Q3 Earnings Estimates?


Boston Scientific Corporation (BSX Quick QuoteBSX ) is scheduled to report third-quarter 2022 results on Oct 26, before the opening bell.

In the last reported quarter, the company’s earnings per share of 44 cents exceeded the Zacks Consensus Estimate by 4.8%. BSX’s bottom line beat estimates in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 3.04%, on average.

Factors at Play

Boston Scientific expects third-quarter 2022 operational revenue growth in the range of 10% to 12% year over year. This excludes an approximate 400-basis point headwind from foreign exchange based on rates during the time of the Q2 earnings release but includes a 200-basis point contribution from the acquisitions of Farapulse, Lumenis and Baylis. Excluding the impact of acquisitions, the company expects third-quarter 2022 organic revenue growth to be in the range of 8% to 10% against a much tougher year-over-year comparison.

Meanwhile, BSX’s top line is likely to have improved year over year, with non-COVID elective medical procedures running in a full-fledged way in the United States and elsewhere across the globe. Given the improving scenario along with an innovative pipeline, expansion into faster growth markets, globalization efforts and enhanced digital capabilities, Boston Scientific is well-positioned to register decent third-quarter 2022 results.

However, the rate of growth is expected to have remained sluggish, thanks to the emergence of the monkeypox waves in the past few months. The back-to-back attack of infectious diseases worldwide resulted in significant staffing shortages and supply disruption through the months of the third quarter. Further, given the ongoing inflationary situation, the business is expected to have faced the hurdle of surging labor and raw material cost, which might have weighed on BSX’s bottom line in Q3.

Boston Scientific Corporation Price and EPS Surprise Boston Scientific Corporation Price and EPS Surprise

Boston Scientific Corporation price-eps-surprise | Boston Scientific Corporation Quote

On a geographic basis, every market of Boston Scientific is expected to have registered broad-based growth in the quarter under review on a year-over-year basis, considering the fact that the COVID impacts intensified in the third quarter of 2021.

The company is expected to have registered strong growth in EMEA within structural heart, including TAVR, WATCHMAN, and other interventional cardiology therapies, as well as electrophysiology divisions, fueled by new product launches. In the Asia Pacific — particularly in Japan and Australia — product launches are expected to have contributed to the company’s top line. However, given the COVID wave and related restrictions in China, Boston Scientific anticipates more pressure on underlying procedural volumes in the second quarter.

In the newly-formed WATCHMAN subsegment within the Cardiovascular division, according to the company, WATCHMAN is on track to deliver full-year double-digit growth with sustained momentum from the second-generation WATCHMAN FLX, ongoing clinical evidence, globalization, and commercial execution. Over the past few months, the company has continued making progress with new products and commenced the first WATCHMAN FLX cases in China, Korea, Singapore and Malaysia. This growth should get reflected in the third-quarter results.

The Interventional Cardiology (IC) business is expected to have registered year-over-year growth in Structural Heart Valves and Complex PCI and Imaging franchises. The company had earlier discussed expanding its U.S. Vercise Genus offering in 2022 in partnership with Brainlab. The company’s imaging business is progressing as itsAVVIGO II guidance system moved into full launch in the United States. Internationally, strong growth continued, banking on the wide portfolio of imaging in treating complex coronary disease. All these might have positively contributed to third-quarter IC revenues.

In Structural Heart franchises, the ACURATE neo2 launch in Europe is expected to have registered a positive performance in Q2.

Within the Peripheral Interventions (PI) business, third-quarter sales are expected to have been strong, banking on the strong performance of the drug-eluting franchise, supported by ongoing clinical evidence and the company’s category leadership portfolio. Within Venous, Varithena is expected to report another quarter of strong growth, driven by a strong underlying market and penetration in new accounts.

Interventional Oncology is expected to have gained from strong momentum in the company’s advanced cancer therapies, TheraSphere and ICEfx, as well as the robust set of embolization access and delivery tools.

Within Urology/ Pelvic Health, sales of Stone, Prostate Health and Pelvic Health franchises are expected to have recorded strong growth banking on ongoing product launches such as LithoVue and SpaceOAR in key countries, with the momentum continuing with the recent approval of the Tria Firm Ureteral Stent in China. The Lumenis integration is expected to have made a strong contribution to the company’s sales.

Within Endoscopy, broad-based recovery across regions and growing strength in infection prevention are expected to have driven second-quarter revenues. The company is expected to report strong momentum in biliary hemostasis and single-use imaging franchise.

Within Neuromodulation, the company is likely to have registered balanced procedure recovery across RF (radiofrequency), Vertiflex and Spinal Cord Stimulation on strong execution of category leadership strategy in pain. The U.S. launches of WaveWriter Alpha and Vercise Genusare are expected to have boosted the top line.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter total revenues is pegged at $3.14 billion, suggesting an improvement of 7.1% from the prior-year quarter’s reported number. Our model estimates 7.7% growth in Q3 revenues on a year-over-year basis.

The consensus mark for adjusted earnings stands at 44 cents per share, implying a 7.3% rise from the year-ago quarter’s reported figure. Per the Zacks model, adjusted earnings growth is expected to be 8% year over year.

What Our Quantitative Model Predicts

Per our proven model, a stock with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. This is exactly the case as you can see below.

Earnings ESP: Boston Scientific has an Earnings ESP of +2.63%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Boston Scientific carries a Zacks Rank #3.

Other Stocks to Consider

Here are some medical stocks worth considering as these also have the right combination of elements to post an earnings beat this quarter.

Charles River Laboratories International (CRL Quick QuoteCRL ) has an Earnings ESP of +0.66% and a Zacks Rank of #3. The company will release third-quarter 2022 results on Nov 2.

Charles River has a long-term historical earnings growth rate of 17.7%. Charles River’s earnings yield of 5.47% compares favorably with the industry’s -2.84%.

McKesson (MCK Quick QuoteMCK ) has an Earnings ESP of +0.27% and a Zacks Rank of #2. McKesson is scheduled to release third-quarter 2022 results on Nov 1.

McKesson’s long-term historical earnings growth rate is estimated at 14.2%. MCK’s earnings yield of 6.94% compares favorably with the industry’s 5.22%.

Humana (HUM Quick QuoteHUM ) currently has an Earnings ESP of +0.76% and a Zacks Rank of #1. Humana is slated to release third-quarter 2022 results on Nov 2.

Humana’s long-term historical earnings growth rate is estimated at 16.2%. HUM’s earnings yield of 5.02% compares favorably with the industry’s 5.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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