How did Boston Scientific perform against its own guidance in Q3 2024?

Boston Scientific beat its guidance on sales and adjusted EPS. Reported net sales growth of 19.4% and organic growth of 18.2% both exceeded the 13% to 15% guidance range, and adjusted EPS of $0.63 topped the $0.57 to $0.59 range. GAAP EPS of $0.32, however, came in below the $0.36 to $0.38 range.

Why is GAAP EPS so much lower than adjusted EPS?

The gap comes from non-GAAP adjustments excluded from adjusted EPS. The largest items in Q3 were amortization expense ($0.12 per share), acquisition/divestiture-related net charges ($0.13 per share), restructuring charges ($0.03 per share), and deferred tax expenses ($0.03 per share). Management excludes these items to show underlying operating performance, though investors should note that acquisition-related and amortization costs recur over time.

What is driving Boston Scientific's growth?

Growth is concentrated in Cardiovascular, which rose 25.0% reported, with Cardiology up 29.2% on strong demand for the FARAPULSE pulsed field ablation system. MedSurg grew 10.3% reported but only 7.7% organically. Geographically, the U.S. grew 23.5%, the strongest region, while international markets grew at a slower pace.

How does the company's outlook for the rest of 2024 look?

Management expects full-year 2024 reported net sales growth of about 16.5% and organic growth of about 15%. For Q4, it expects reported growth of 16.5% to 18.5% and organic growth of 14% to 16%. Adjusted EPS guidance is $2.45 to $2.47 for the year and $0.64 to $0.66 for Q4. The fourth-quarter organic growth range implies some deceleration from the third quarter's 18.2%.

How much of the reported growth came from acquisitions and currency?

Currency had a negligible effect, adding only 0.1 percentage points in Q3, so most of the gap between reported and organic growth reflects acquisitions. The Silk Road Medical acquisition, which closed during the quarter, subtracted about 1.3 percentage points from reported growth in the organic reconciliation, and the company expects a roughly 2 percentage point impact in Q4 and for the full year.

BSX 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 23, 2024. Cited figures are marked; the original filing is the authoritative source.

Boston Scientific reported strong third-quarter 2024 results for the period ended September 30, 2024.

Net sales reached $4.209 billion^a, up 19.4% on a reported basis and 18.2% on an organic basis, beating the company's guidance range of 13 to 15 percent. Growth was driven overwhelmingly by Cardiovascular, which rose 25.0% reported to $2.731 billion, led by Cardiology up 29.2%, while MedSurg grew 10.3% reported (7.7% organic). The U.S. was the standout region at 23.5% growth, and Emerging Markets grew 15.2% reported.

GAAP EPS was $0.32^b, down from $0.34 a year earlier and below the $0.36 to $0.38 guidance range, largely reflecting acquisition-related charges, amortization, and a higher tax expense. Adjusted EPS of $0.63 came in well above the $0.57 to $0.59 guidance range, versus $0.50 a year ago. Management raised its outlook for the year and the fourth quarter.

Full-year 2024 reported net sales growth is now guided to approximately 16.5% (about 15% organic), and fourth-quarter reported growth to 16.5% to 18.5%, with organic growth of 14% to 16%. Adjusted EPS guidance is $2.45 to $2.47^c for the full year and $0.64 to $0.66 for the fourth quarter, while GAAP EPS guidance is $1.28 to $1.30 for the year and $0.41 to $0.43 for the quarter. The filing also notes the completed acquisition of Silk Road Medical, which contributed to reported growth above organic growth and is reflected in the guidance reconciliation as a roughly 2 percentage point headwind to organic growth adjustments.

From an investor standpoint, the quarter shows broad-based momentum, particularly in cardiology, the FARAPULSE pulsed field ablation franchise, and international expansion. Investors should weigh the gap between strong adjusted results and lower GAAP earnings, which is driven by recurring acquisition-related and amortization charges, and monitor how sustainable the very high Cardiology growth rate is as comparisons become more difficult.

02—Key points

Key Highlights

Net sales of $4.209 billion grew 19.4% reported and 18.2% organic year over year, exceeding the company's 13% to 15% guidance range.
Cardiovascular sales rose 25.0% to $2.731 billion, with Cardiology up 29.2%, driven by the FARAPULSE pulsed field ablation system and other cardiac franchises.
Adjusted EPS of $0.63 beat the $0.57 to $0.59 guidance range and rose from $0.50 a year earlier; GAAP EPS of $0.32 fell short of the $0.36 to $0.38 range and was down from $0.34.
U.S. sales grew 23.5%, while EMEA grew 15.2% reported and APAC grew 12.1% reported; Emerging Markets grew 15.2% reported.
Full-year 2024 guidance was set at approximately 16.5% reported and 15% organic net sales growth, with adjusted EPS of $2.45 to $2.47 and GAAP EPS of $1.28 to $1.30.
Fourth-quarter guidance calls for 16.5% to 18.5% reported and 14% to 16% organic growth, with adjusted EPS of $0.64 to $0.66.
Regulatory and commercial milestones included FDA approval of the FARAWAVE NAV Ablation Catheter, CE mark and European launch of ACURATE Prime, and completion of the Silk Road Medical acquisition.

03—Questions

Frequently Asked Questions

How did Boston Scientific perform against its own guidance in Q3 2024?
Boston Scientific beat its guidance on sales and adjusted EPS. Reported net sales growth of 19.4% and organic growth of 18.2% both exceeded the 13% to 15% guidance range, and adjusted EPS of $0.63 topped the $0.57 to $0.59 range. GAAP EPS of $0.32, however, came in below the $0.36 to $0.38 range.
Why is GAAP EPS so much lower than adjusted EPS?
The gap comes from non-GAAP adjustments excluded from adjusted EPS. The largest items in Q3 were amortization expense ($0.12 per share), acquisition/divestiture-related net charges ($0.13 per share), restructuring charges ($0.03 per share), and deferred tax expenses ($0.03 per share). Management excludes these items to show underlying operating performance, though investors should note that acquisition-related and amortization costs recur over time.
What is driving Boston Scientific's growth?
Growth is concentrated in Cardiovascular, which rose 25.0% reported, with Cardiology up 29.2% on strong demand for the FARAPULSE pulsed field ablation system. MedSurg grew 10.3% reported but only 7.7% organically. Geographically, the U.S. grew 23.5%, the strongest region, while international markets grew at a slower pace.
How does the company's outlook for the rest of 2024 look?
Management expects full-year 2024 reported net sales growth of about 16.5% and organic growth of about 15%. For Q4, it expects reported growth of 16.5% to 18.5% and organic growth of 14% to 16%. Adjusted EPS guidance is $2.45 to $2.47 for the year and $0.64 to $0.66 for Q4. The fourth-quarter organic growth range implies some deceleration from the third quarter's 18.2%.
How much of the reported growth came from acquisitions and currency?
Currency had a negligible effect, adding only 0.1 percentage points in Q3, so most of the gap between reported and organic growth reflects acquisitions. The Silk Road Medical acquisition, which closed during the quarter, subtracted about 1.3 percentage points from reported growth in the organic reconciliation, and the company expects a roughly 2 percentage point impact in Q4 and for the full year.

04—Continue

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