Dive Brief:
- Boston Scientific continued its recovery from the coronavirus pandemic in the second quarter, performing above both last year's and 2019's results and raising full-year 2021 guidance for the second straight quarter.
- The company brought in just over $3 billion in sales, about 54% growth over the second quarter of 2020 and 17% over 2019. CEO Michael Mahoney on a Tuesday earnings call said continued 2021 success came behind a faster-than-expected pandemic recovery, helped by the gradual return of elective procedures. Although, the recovery is still varying by geography, with Latin America and Canada and the U.S. posting the largest year-over-year growth as businesses in regions like Asia saw greater COVID-19 impact, particularly Japan.
- Both J.P. Morgan and Evercore ISI analysts wrote that Boston Scientific is set up for a strong back half of the year after two straight quarters of growth and increased guidance. "All in, in the context of fears of a summer slowdown, we think the Beat and above ST Guide raise are enough to sustain BSX's momentum," Evercore analysts wrote.
Dive Insight:
Boston Scientific joins Johnson & Johnson, Intuitive Surgical and Abbott Laboratories similarly reporting growth in the second quarter above 2019, and analysts project the trend in early results to hold.
Amid these results, the delta variant of the coronavirus is causing surges in the U.S. and around the world. Ashley McEvoy, executive vice president and worldwide chairman of J&J's medical devices business, said last week that some hospitals have been forced to delay procedures once again due to rising volumes of patients with COVID-19.
Boston Scientific executives, however, do not expect a meaningful change to the environment between the second quarter and the remainder of the year. "We're expecting the trends that we saw in the second quarter to continue ... in the back half of '21," CFO Daniel Brennan told investors Tuesday.
Mahoney similarly expects the second-quarter performance to continue in the third and fourth quarters, with a "manageable level of COVID impact in the second half of the year."
The company's growth in the quarter was led by the medsurg, and rhythm and neuro segments, both of which grew about 65% compared to the prior year's quarter. Mahoney said the quarter's growth was across nearly the entire company though with some regional variation.
"We think every business — globally and the U.S. — grew double-digit organically versus '19 and likely gained share in their respective markets with the exception of, potentially, [electrophysiology] and [cardiac rhythm management]," the CEO said.
Boston Scientific raised 2021 guidance for organic sales growth to a range of 19-20% compared to 2020. The new range is up from guidance of 15-18% sales growth, which the company provided during the first-quarter earnings call, and up from 12-18% given in February.
J.P. Morgan analysts wrote in a Tuesday note the "outlook factors in a conservative 3Q outlook that should set up further beat-and-raise quarters in the back half of the year."
The company's roughly $3 billion in sales beat J.P. Morgan's expectations of $2.93 billion for the quarter. Shares were up over 3% in late morning trade on Tuesday.
