Boston Scientific's profits drop 97% as Q1 sales rise amid outbreak
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Boston Scientific's Marlborough headquarters
Boston Scientific said at the start of April it would temporarily reduce some employee work schedules and reduce executive and board pay, citing an expected effect of medical offices delaying elective surgeries.
But the coronavirus pandemic hasn't hurt the Marlborough medical device maker's revenue, at least through the quarter ending March 31.
Boston Scientific reported on Wednesday a 2% year-over-year increase in net sales, surpassing $2.5 billion. Net income fell sharply, however, from $424 million a year ago to $11 million this year. That drop was attributable to rising operating expenses, including for contingency considerations, administrative costs and amortization.
Income per share was $0.01, compared to $0.31 a year ago. Sales were strongest in the United States, where revenue grew more than 3%, but fell overseas.
Boston Scientific still expects a hit from the pandemic. The company withdrew its sales guidance for 2020 at the end of March, blaming coronavirus and the timing of a global recovery.
When the company announced work schedule reductions April 2, it also said it expected second-quarter results to show a greater hit from the outbreak. It said then 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.
For the first quarter, at least, sales of cardiovascular equipment increased nearly 6%, and medical and surgical equipment by 1%. The company's rhythm and neuro unit, which includes interventional cardiology, fell nearly 8%.
Boston Scientific stock was up less than 2% on the earnings report Wednesday morning, at around $36.57 a share. Share prices peaked before the virus hit at $45.71 on Jan. 9.
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