Boston Scientific lost $147M in 2Q amid COVID fallout
Photo | TMS Aerial Solutions
Boston Scientific's Marlborough headquarters
Boston Scientific saw sales plunge by 24% in the second quarter, a loss of roughly $630 million from the same point a year ago in struggles the Marlborough medical device manufacturer foreshadowed with temporary work schedule reductions and executive pay cuts in the spring.
That drop in sales resulted in the company taking a $147 million net loss in the second quarter, compared to the $154 million in profit it made in the second quarter 2019. That loss equated to a 11 cents per share.
The second quarter numbers reported Wednesday include an operating loss of $71 million, a sharp swing from a year prior when the medical device firm reported $384 million in operating income.
Sales were down the sharpest in the United States, which continues to battle the coronavirus pandemic while other developed markets in Europe and Asia have largely reduced the spread of cases. U.S. sales fell 28.4%, and the region including Europe, the Middle East and Africa declined by 27.2% on a reported basis. Asia Pacific sales were down 14.8% on a reported basis.
For Boston Scientific, the second quarter is the first time the pandemic has fully shown its effect on revenue, which can be heavily influenced by delayed medical procedures not related to the pandemic. The company's first quarter earnings covered a period of time through March 31, when the virus had yet to make a significant effect on the United States. For that period, the company reported a 2% year-over-year increase in net sales, surpassing $2.5 billion.
But Boston Scientific also foresaw major challenges ahead.
The company withdrew its sales guidance for 2020 at the end of March, blaming coronavirus and the timing of a global recovery. Days later, it announced work schedule reductions and said it would significantly reduce the salaries of its CEO, board of directors and executive committee members, cut discretionary spending and take precautionary measures including limiting movement across its building sites.
Sales in the areas of endoscopy, urology, interventional cardiology and other medical devices each fell in the second quarter by at least one-fourth. Net sales totaled just over $2 billion, down from more than $2.6 billion a year prior.
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