Boston Scientific Corporation ( NYSE: BSX ) shares edged lower in the pre-market trading Wednesday after reporting Q4 2022 earnings that fell short of the company’s own guidance and Wall Street forecasts.
The medical device maker failed to meet its quarterly guidance for GAAP earnings per share as GAAP net income available to common stockholders stood at $0.09 compared to $0.23 – $0.28 in the forecast. The adjusted earnings per share at $0.45 met the lower end of the guidance but fell short of $0.47 in the consensus.
The topline indicated headwinds related to reserves the company made to account for certain government payback provisions in Italy. Aimed at curtailing public spending, the provision requires medical device makers to payback a share of expenditure that exceeded the allocated healthcare budgets.
After recording ~12% YoY growth in Q3 2022, Boston Scientific ( BSX ) reported ~7% YoY organic growth during the quarter as the negative impact from the provision stood at 200bps.
Meanwhile, net sales for the quarter reached ~$3.2B indicating ~4% YoY on a reported basis in-line with Street forecasts. Net sales for the full year climbed ~13% YoY to $12.7B on a reported basis while organic growth reached ~9% YoY amid 50bps adverse impact associated with the payback provisions.
The company’s MedSurg and Cardiovascular segments added $1.3B and $2.0B net sales to the topline indicating ~4% YoY and ~6% YoY growth for the quarter, respectively.
The U.S. led revenue generation bringing $2.0B in net sales with ~11% YoY growth while the EMEA region added $657M net sales implying ~1% YoY decline.
Boston Scientific ( BSX ) projects its net sales growth and adjusted earnings per share for 2023 to reach approximately 5% - 7% YoY and $1.86 – $1.93 compared to ~6% YoY and $1.93 in the consensus, respectively. Q1 2023 net sales growth and adj. earnings per share are expected to reach approximately 3% - 5% and $0.42 – $0.44, respectively, which stand in line with the consensus.
Seeking Alpha contributor Andrew Harvey wrote in December that Boston Scientific ( BSX ) is “overvalued in many ways,” and a price correction could be imminent.
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Boston Scientific slips as quarterly earnings miss guidance