Boston Scientific 2Q Profit Up 61%, Narrows Full-Year View

Boston Scientific Corp.'s (BSX) second-quarter earnings surged 61%, as stronger U.S. sales more than offset a decline abroad, and the company reported fewer charges.

Following the results, which included better-than-expected revenue growth, shares were up 7.4%, to $11.06, in after-hours trading. The shares are up by over a third so far this year.

The medical-device maker also narrowed its full-year projection, lowering the high-end of its earnings and revenue target.

Boston Scientific has reported earnings in line with its guidance for several quarters, as it has stabilized its drug-eluting stent business and improved its cardiac rhythm management business. The company has maintained its leading market share in the drug-eluting stent market, cut costs and cut its debt load.

As a result, two ratings agencies have placed positive outlooks on the company's credit ratings in recent months, suggesting they may return to investment grade.

The company reported earnings of $158 million, or 10 cents a share, up from $98 million, or 7 cents a share, a year earlier.

The latest results included $158 million, or 10 cents a share, in asset impairments, research and restructuring charges, among other items. The prior year's results included $206 million, or about 13 cents a share, in acquisition, divestiture, amortization and restructuring-related charges.

Excluding those items, earnings were flat, at 20 cents a share.

Net sales grew 2.5%, to $2.07 billion. Excluding the impact of currencies and sales from divested businesses, sales were up 7%.

In April, the company projected per-share earnings of 16 cents to 21 cents on revenue of $1.96 billion to $2.05 billion.

Gross margin fell to 69.6% from 70.2%.

Worldwide sales of the company's stents, tiny metal scaffolds used to prop open heart arteries, rose 10%, with revenue up 27% in the U.S. and down 3.8% abroad.

Worldwide sales of heart-rhythm management devices, including implantable cardioverter defibrillators, or ICDs, improved 5.4%, as U.S. sales increased 11% and sales abroad declined 4.7%.

Looking ahead, Boston Scientific projected third-quarter per-share earnings, excluding items, of 17 cents to 21 cents on revenue of $2 billion to $2.1 billion.

For the full year, the company narrowed its forecast, seeing earnings between 82 cents and 86 cents a share, excluding items, on revenue of $8.1 billion to $8.4 billion, from its April view of 80 cents to 90 cents on revenue of $8 billion to $8.5 billion.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]