On a non-GAAP basis, the company posted a $0.24-per-share profit, but it was pummeled by $939 million in charges, including $365 million related to patent litigation, $208 million tied to losses on business segments it sold, and $184 million in charges to cut its workforce by 8%. The charges swung the medical-device maker into a $0.31-per-share loss for the quarter and dug a pretty deep $0.33-per-share hole for the year.
Nevertheless, revenues were up year over year, with sales of cardiac rhythm management products up 11% -- likely helped by Medtronic's
Drug-eluting stents, on the other hand, didn't fare too well. The company saw worldwide sales of its coronary stent systems slip 10% year over year. Fortunately, market share against Johnson & Johnson
The good news is that it gets to sell Abbott's stent under its own brand name. If its sales force can work the magic that got Boston Scientific into the No. 1 position, 2008 might be an OK year for the medical-device maker. With the cost savings from the charges about to set in, Boston Scientific is shooting for a 15%-20% increase in adjusted earnings per share.
Looking a little more long-term, the cost savings will eventually run out, and Boston Scientific is going to need to show that it can return to the substantial revenue growth it has produced in the past. Ultimately, the drug-eluting stent market will make or break Boston Scientific, and we should know by year-end how the four-way race is going.