A slowdown in medical procedures due to the COVID-19 pandemic caused a decline in first-quarter profits at medical device maker Boston Scientific (BSX -1.02%), but the company still managed a small sales gain, and management made encouraging comments about the future in its earnings call Wednesday. In response to the report and the commentary, shares rose almost 4%.
Sales grew 2% to $2.54 billion, and were up 3.2% excluding the effect of foreign currency moves. But adjusted earnings per share fell 20% to $0.28. Analysts had been expecting the company to earn $0.31 per share on sales of $2.52 billion.
Boston Scientific said on the conference call that its business in the first two months of the year had been consistent with its expectations, which were for sales growth of 10% to 12%. But sales dropped quickly in mid-March as hospitals and clinics canceled most procedures that could be delayed in order to conserve vital medical resources for fighting the pandemic and protecting healthcare workers from COVID-19.
Further, management noted, revenue in April was down 45% to 50% year over year. The company's cardiovascular business ended Q1 with a 5.5% sales gain, medical/surgical sales grew 1.1%, and rhythm and neurological sales, which support procedures that are more easily delayed, fell 7.2%.
Boston Scientific is cutting costs aggressively, but expressed confidence that the cuts won't affect its competitiveness. Management noted that two-thirds of its business is related to procedures done in out-patient settings, and it believes that the medical providers that perform them will recover more quickly than hospitals. The company refrained from giving specific guidance, but said it believes it will return to growth in the fourth quarter.