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Oct. 20 (Bloomberg) -- Boston Scientific Corp., the second- biggest heart-device maker by revenue, said third-quarter profit declined 25 percent as demand fell for its defibrillators and pacemakers used to regulate the heart.
Net income dropped to $142 million, or 9 cents a share, from $190 million, or 13 cents, a year earlier, the Natick, Massachusetts-based company said today in a statement. Earnings excluding one-time items were 15 cents a share, beating by 6 cents the average estimate of 22 analysts surveyed by Bloomberg.
Boston Scientific has been stymied by slowing demand and falling prices for its main products to treat abnormal heart rhythms and open clogged arteries. Hank Kucheman assumed the role of interim chief executive officer today, a position he will hold until Michael Mahoney, former chairman of Johnson & Johnson’s medical device group, takes the helm next year.
“Boston’s ICD franchise continues to underperform in a struggling market,” said Michael Weinstein, an analyst at JPMorgan Chase & Co., in a note to investors today. “Unlike the past couple of quarters, Boston’s non-cardiac rhythm management businesses could not offset the ICD shortfall.”
Boston Scientific fell 4.4 percent to $5.39 at 4:01 p.m. New York time. Mahoney will serve as president of the company until he fulfills post-employment obligations to New Brunswick, New Jersey-based J&J, Boston Scientific has said.
The medical device maker is on schedule to post its first annual profit since 2005. The company forecast adjusted earnings of 67 to 70 cents a share for the year, up from the 64 to 70 cents it projected earlier this year. Sales for 2011 will be between $7.62 billion and $7.72 billion. Analysts estimated sales of $7.78 billion for the year, according to Bloomberg data.
Boston Scientific reported third-quarter revenue of $1.87 billion, falling short of analysts’ estimates of $1.91 billion and sales of $1.92 billion a year earlier. U.S. sales of defibrillators used to shock a stopped heart back into a normal rhythm were $225 million, down from $280 million a year earlier, while worldwide sales declined 11 percent to $360 million.
The market weakened more than the company expected in July and August, likely because of vacations and job changes, Chief Financial Officer Jeff Capello said on a conference call. There has been an increase in demand since then, he said.
“Particularly the end of September the volumes increased, and as we look at our results for the first 10, 12 days in October, they stepped up again, which gives us some confidence that things are starting to come back a little,” Capello said. “But it’s too early to tell.”
Sales of the company’s stents, used to prop open clogged heart arteries, fell to $198 million in the U.S. from $210 million a year earlier. Worldwide sales rose to $402 million from $396 million a year earlier.
Johnson & Johnson announced in June it will pull out of the $4 billion global market for drug-coated stents by the end of the year after losing ground to Boston Scientific, the market leader, and Abbott Laboratories.
--Editors: Angela Zimm, Bruce Rule
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