Today, as expected, the company released a blowout earnings report. Sales were up 67%. Net income was up 200%, even after a $57 million (after-tax) charge for the Taxus recall.
This first full quarter with Taxus drug-coated coronary stent sales caused Boston Scientific's cardiovascular sales to jump 105% to $1.1 billion. Even better, this highly profitable product swelled overall operating margins from 20% last year to 31% now -- a premier level where competitor Medtronic
Although the company will not release revised 2004 earnings guidance until the first week of September (so sales trends can be clearly established), the company did say that stent prices have remained stable and that sales are doing well.
Firm pricing is a good indication that competitor Johnson & Johnson
Competitors Medtronic and Guidant
Analysts currently project 2004 earnings of $1.72 a share, or 21 times forward earnings (and 15 times 2005 projections). Barring any unforeseen change, Boston Scientific is poised to maintain its market leadership in the growing and highly profitable stent market.
Investors may question why the Boston Scientific news has not helped drug partner Angiotech
Fool contributor W.D. Crotty had a cardiac catheterization last year. The doctor and attending nurse were J&J shareholders. They laughed at the thought of implanting a J&J product, knowing W.D. was (and still is) a Boston Scientific shareholder. W.D. also owns stock in Medtronic.