After the third quarter, I pointed out that Boston Scientific
The pacemakers and defibrillators that Guidant contributed are still growing strong -- they were up 5% year over year -- but the company had to take a whopping $2.7 billion goodwill writedown because the value of what it purchased has changed. That's 10% of the purchase price wiped away. Boston Scientific blamed changes in market demand for the implantable devices and disruptions in the credit and equity markets.
In the end though, it's just an accounting issue, like the monster charge Time Warner
Sales of stents -- the company's other major product line -- fell 4% for the quarter and 8.6% for the year as Abbott Labs'
For this year, Boston Scientific is expecting to have sales growth of negative 1% to positive 6%, as reported. Lowered costs should help the bottom line increase more, with a 7% to 20% increase in adjusted earnings per share this year to $0.80 to $0.90. That gives it a forward price-to-earnings ratio of right around 10, which seems reasonable given the turnaround that it looks like Boston Scientific might just pull off.
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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is a Motley Fool Income Investor pick. The Fool's disclosure policy has never been blinded by science.