Boston Scientific temporarily reducing some work schedules, cutting executive pay
Photo | TMS Aerial Solutions
Boston Scientific's Marlborough headquarters
Boston Scientific is temporarily reducing some employee work schedules and reducing executive and board pay as the Marlborough medical device maker says it has been hurt by delays in elective surgeries during the coronavirus outbreak.
Procedure volumes have declined significantly, and Boston Scientific now expects first-quarter revenue growth to be roughly flat, the company said Thursday, but is taking cost-saving steps because it expects the second quarter to show a greater hit.
The company said in an earnings report Feb. 5, when the outbreak was affecting overseas manufacturing more than the American economy, that it expected the outbreak to decrease its sales by $10 million to $40 million in the first quarter.
"As healthcare systems respond to the increasing demands of managing COVID-19, emergent procedures need to be prioritized to help enable increased hospital capacity, and therefore elective procedures are being delayed," Mike Mahoney, Boston Scientific's chairman and CEO, said in a statement. "While we expect this to negatively impact short-term performance, we continue to believe in the excellent, long-term fundamentals of our company and will continue to manage through these challenges with strategic focus and the winning spirit of our talented global team."
Boston Scientific said it will optimize manufacturing output and significantly reduce the salaries of its CEO, board of directors and executive committee members. It is also cutting discretionary spending and taking precautionary measures including limiting movement across its building sites.
The company's stock was trending up on Thursday morning, up 3.3% to $31.21 per share on the New York Stock Exchange, compared to the Dow Jones Industrial Average and S&P 500 indexes, which were both up about 1.3% on Thursday.
However, Boston Scientific's stock is down 28% since Feb. 21, when the coronavirus pandemic started negatively impacting stock markets. That drop mirrors the DJIA decrease.
The company is taking steps to help address urgent needs for medical protective equipment and ventilators.
It said it is working with the University of Minnesota Bakken Medical Device Center and industry collaborators to bring a ventilator alternative to the market and working to develop a reusable personal respirator. It is also producing face shields at three United States manufacturing sites through a collaboration with the nonprofit GetUsPPE.org and plastic packaging company Prent Corp.
WBJ Web Partners
Most Recent
Most Recent
0 Comments