On Thursday, the healthcare-device specialist published an update for its investors, and one of the key points was a reduction in its outlook for its just-completed Q1 of fiscal 2020. It now believes GAAP revenue will be flat to "up slightly" on a year-over-year basis, with organic revenue falling by roughly 2% to 3%. It didn't provide any kind of forecast for profitability or update its annual guidance.
The new outlook represents a significant adjustment for the company. Previously, it had anticipated 10% to 12% revenue growth on a reported basis for the quarter, with organic growth well in positive territory at 5% to 7%. It felt that non-GAAP (adjusted) per-share earnings would fall in the $0.37 to $0.40 per-share range. At the time, the company factored in the effects of the coronavirus outbreak on its business.
For the entirety of fiscal 2020, Boston Scientific had been modeling -- again -- a GAAP revenue increase of 10% to 12%. It believed organic growth would be 6.5% to 8.5%. Adjusted earnings were forecast at $1.74 to $1.79 per share.
In the update, the company detailed the measures it was taking to reduce costs. Specifically, it wrote that "[t]hese steps include optimizing appropriate variable costs, including manufacturing output, significantly reducing the salaries of its chief executive officer, board of directors and executive committee members, and where appropriate, temporarily reducing work week schedules for employees." It did not get more specific.
On Thursday, Boston Scientific stock rose by almost 3%, slightly outpacing the major equity indexes.