July 24--Boston Scientific Corp. saw a drop in U.S. sales of core heart-rhythm devices like pacemakers and defibrillators in the last quarter -- and the trend is expected to continue for the rest of the year.
But executives remain upbeat about sales of cardiac devices, handled by Boston Scientific's division in Arden Hills. On Wednesday, CEO Mike Mahoney said investors should look to Europe, where a suite of newly approved devices have helped drive a 5 percent growth for several consecutive quarters.
"We have a very strong portfolio, and that's the portfolio that we'll be launching essentially in 2016 in the U.S.," Mahoney told investors Thursday morning. In an interview later, he added, "the business is also improving margin. So it is certainly contributing in a big way to the company overall."
Boston Scientific is going through what analysts at Leerink Partners called a "sales turnaround," but it was masked by fluctuations in international currencies.
The company's adjusted earnings per share of 22 cents for the three months ended June 30 beat Wall Street estimates by a penny. Total sales fell by 2 percent compared to the same quarter last year, to $1.84 billion. Adjusting the sales figures for currency fluctuations, the company reported revenue growth of 6 percent.
Mahoney said it was at least the fourth consecutive quarter of constant-currency revenue growth of 6 percent, and it happened amid roll outs of new products. Those include the closely scrutinized Watchman stroke-prevention device that seals off the heart's left atrial appendage, and the European launch of Lotus, Boston Scientific's transcatheter aortic valve replacement system.
The cardiovascular devices division grew sales by 10 percent to $812 million in the second quarter, and the MedSurg unit for endoscopy, urology and neuromodulation products grew sales by 7 percent, using constant-currency figures.
Heart-rhythm management devices like pacemakers and defibrillators declined by 1 percent to $490 million, becoming the only company division to show a drop compared to the same period last year.
Mahoney predicted rhythm-management sales should pick up again with the U.S. launch of products including the Emblem, an implantable defibrillator that does not require leads touching the heart.
Boston Scientific is headquartered in Massachusetts, but it employs about 5,000 Minnesotans between its Arden Hills and Maple Grove campuses. Last year the company derived about two-thirds of its global sales from Minnesota-based cardiology and vascular-intervention units.
For the full year of 2015, the company updated its revenue forecast to a range of $7.275 billion to $7.375 billion. Such a result would represent change in the range of a 1 percent loss to flat growth compared to 2014 results. It forecasts adjusted earnings per share of 88 cents to 92 cents.
Boston Scientific shares dropped 2 percent Thursday, to $17.61.
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