How Did Boston Scientific’s Stock Move after Its 4Q15 Earnings Release?

Boston Scientific Had a Worthy 4Q15, But Worth Writing Home About?

(Continued from Prior Part)

Share price movement

On February 04, 2016, Boston Scientific Corporation (BSX) released its 4Q15 earnings. The company beat the earnings consensus for EPS in 4Q15 and managed to meet its quarterly EPS guidance, but it failed to meet the consensus revenue estimates. After the announcement, Boston Scientific’s share price declined by approximately 2.2% from $17.73 on February 03, 2016.

Lower-than-expected revenues and the pronounced impact of currency headwinds—on the company’s top and bottom line—attributed to the decline of BSX’s share price amid weak investor sentiments. Notably, the share price of the company has fallen by approximately 12.6% since its 3Q15 earnings results published on October 28, 2015.

Boston Scientific’s strong fundamentals

That said, Boston Scientific reported strong operational growth, with all its business segments reporting sales growth except its CRM (Cardiac Rhythm Management) division. Although the operating margin for the CRM segment improved, revenues took a hit. In 1Q16, the company’s growth in sales and margin continued to be driven by key products and new innovative launches.

Moreover, expansion across geographies and business segments and an emerging market growth strategy continue to drive strong operational performance for BSX, which exhibited strong revenue growth of ~15% in emerging markets. China and Brazil contributed 20% to the emerging market growth.

Market share decline amid tough competition

Although the core CRM segment of the company witnessed a decline in market share amid tough competition from other major players such as Medtronic (MDT), Boston Scientific is still well-positioned for significant long-term growth due to a large and diversified product portfolio and geographic presence. Peer companies St. Jude Medical (STJ) and Abbott Laboratories (ABT) are facing similar threats of erosion in the defibrillator market share, due to competition from Medtronic and growing demand for MRI-compatible (magnetic resonance imagining) pacemakers.

Investors can invest in the PowerShares DWA Healthcare Momentum Portfolio (PTH) and get exposure to Boston Scientific Corporation, which accounts for 3.3% of PTH’s total holdings.

Now let’s look at what specifically affected BSX’s revenues in 4Q15.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Weighing in with Boston Scientific’s 4Q15 Revenues

• Part 3 - 4Q15 Boston Scientific Revenues Weakened by CRM Headwinds

• Part 4 - Boston Scientific’s Guidance for 2016