Will WATCHMAN Sales Aid Boston Scientific's Q2 Earnings?

Boston Scientific Corporation BSX is scheduled to report second-quarter 2024 results on Jul 24, before the opening bell.

In the last reported quarter, the company's earnings per share of 56 cents exceeded the Zacks Consensus Estimate by 9.8%. BSX's bottom line beat estimates in each of the trailing four quarters. The company delivered a trailing four-quarter earnings surprise of 7.49%, on average.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter total revenues is pegged at $4.02 billion, suggesting an improvement of 11.7% from the prior-year quarter's reported number.

The consensus mark for adjusted earnings stands at 58 cents per share, implying a 9.4% rise from the year-ago quarter's reported figure.

For the second quarter of 2024, the company projected revenue growth in the range of approximately 10.5-12.5% on a reported basis (an increase of 10-12% organically). Adjusted earnings are expected in the range of 57-59 cents per share.

Estimate Revision Trend Ahead of Earnings

The Zacks Consensus Estimate for Boston Scientific's second-quarter earnings has remained unchanged at 58 cents per share in the past 60 days.

Let's briefly look at how things have progressed for the MedTech major leading up to this announcement.

Factors at Play

With U.S. hospital visits being on the rise through the second-quarter months of 2024, Boston Scientific, with its innovative pipeline, expansion into faster growth markets, globalization efforts and enhanced digital capabilities, looks well-positioned to report decent sales results for this period.

However, the rate of growth is expected to have remained sluggish amid a challenging supply environment in limited geographies. Further, the business is expected to have faced the hurdle of surging labor and raw material costs, as well as healthcare staffing shortages, which might have weighed on the bottom line in the second quarter.

On a geographic basis, despite all macroeconomic headwinds, the company registered strong growth in every geographic region in the last reported quarter, with core business units gaining or maintaining market share. However, with global staffing issues and the supply chain issue still remaining prominent, the international business of BSX is once again expected to have been partially hurt in the second quarter.

The company is expected to have registered strong growth in the Asia Pacific, led by strength in China and Japan. Growth in Japan is expected to have been fueled by new products, most notably AGENT drug-coated balloon (DCB), Rezum, Access solutions products, POLARx FIT and WATCHMAN FLX. Performance in China is expected to have been led by the company's advanced portfolio, with particular strength in its interventional cardiology therapies, WATCHMAN, CRM and PI business units.

In EMEA, the company is expected to have registered growth within structural heart, including Transcatheter aortic valve replacement, WATCHMAN and other interventional cardiology therapies, as well as endoscopy, urology and electrophysiology divisions, fueled by ongoing investments in emerging markets, new and ongoing product launches across the portfolio, pricing discipline and strong commercial execution. The company is expected to have witnessed strength in ACURATE Neo2 and FARAPULSE.

The WATCHMAN subsegment within the Cardiovascular division has shown meaningful strength in recent times. It is once again expected to report strong growth in the to-be-reported quarter on sustained momentum from second-generation WATCHMAN FLX, ongoing clinical evidence, globalization and commercial execution. With the full launch of WATCHMAN FLX Pro in the United States along with the recent launch of the same in Japan and Canada, this momentum is expected to have continued within the WATCHMAN franchise in the second quarter.

The consensus estimate for WATCHMAN revenues is pegged at $373.7 million for the second quarter, indicating a 17.9% improvement from the year-ago period.

The Interventional Cardiology business is expected to have registered year-over-year growth in the Coronary Therapies franchise, led by sales in the imaging portfolio and AGENTDCB in Japan. The ongoing launch of AVVIGO+, the company's AI-guided imaging platform, is also likely to have contributed to the top line. Further, following the FDA approval of AGENT DCB in the first quarter, the company planned for a limited launch in the second quarter. This, too, might have contributed to top-line growth in the second quarter. However, this might have been offset by the ongoing price pressure on drug-eluting stents.

Structural Heart Valves, Complex PCI and Imaging franchises are expected to have recorded strong growth backed by solid European performance, courtesy of the ACURATE neo2 TAVR platform.

The consensus estimate for Interventional Cardiology revenues of $663.7 million projects a 5.5% improvement in the second quarter.

Within the Peripheral Interventions business, second-quarter sales are expected to have been driven by the strong performance of the drug-eluting franchise, supported by ongoing clinical evidence and the company's category leadership portfolio. Specifically, Arterial franchise revenues are expected to have been strong. Within Venous, the company might have once again witnessed strong sales from Varithena and Clot Management.

Peripheral Interventions revenues are estimated at $584.2 million, implying an improvement of 9.2% in the second quarter.

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. Recently, the company launched its EMBOLD Soft and Packing Coils, which, along with the EMBOLD fibroid coil, complete its detachable coil system.

Within Urology/ Pelvic Health, Stone Management, Prostate Health and Pelvic Health franchises are expected to have recorded strong growth, banking on strong performances of LithoVue and Rezum in key countries.

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 the AXIOS stent and single-use imaging franchise. The growth momentum is expected to have continued with the recent U.S. marketing authorization for an expanded indication of AXIOS to include gallbladder drainage, increasing access to more patients with this platform.

Further, following the CE Mark for the MANTIS Clip, the National Institute for Health and Care Excellence in the UK issued positive guidance for the endoscopic bariatric surgery procedure. This is expected to have boosted sales of the company's endoluminal surgery franchise.

Within Neuromodulation, the company is likely to have registered balanced growth across the Vercise Genus portfolio and the innovative Image Guided Programming, which is designed to improve the precision and efficiency of the deep brain stimulation procedure.

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 not the case, as you can see below.

Earnings ESP: Boston Scientific has an Earnings ESP of -1.72%.

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

Stocks to Consider

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

National Vision EYE has an Earnings ESP of +193.33% and a Zacks Rank #2.

The company is expected to release second-quarter 2024 results soon. National Vision's earnings are expected to decline 17.2% in 2024. National Vision surpassed earnings in each of the trailing four quarters, the average being 62.06%.

Glaukos GKOS has an Earnings ESP of +12.53% and a Zacks Rank #2. The company is due to release second-quarter 2024 results on Jul 31.

Glaukos has an expected earnings growth of 1.3% for 2024. Glaukos is expected to witness revenue growth of 15.1% in 2024.

Tandem Diabetes Care TNDM has an Earnings ESP of +23.54% and a Zacks Rank of 3 at present. The company is scheduled to release its second-quarter 2024 results on Aug 1.

Tandem Diabetes has an expected revenue growth of 15.8% for 2024. Tandem Diabetes has a trailing four-quarter average earnings surprise of 9.92%.

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