TLDR
- Q4 adjusted earnings hit 80 cents per share, topping the 78-cent estimate
- Revenue of $5.29 billion exceeded forecasts with 12.7% organic growth
- Disappointing Q1 guidance projects 8.5% to 10% growth versus 9.8% expected
- Electrophysiology unit missed targets with $890 million versus $933 million estimate
- Premarket trading saw shares drop 8.4% despite the earnings beat
Boston Scientific took a hit Wednesday despite reporting solid fourth-quarter numbers. The medical device company’s stock dropped 8.4% in premarket action as investors focused on what’s coming next rather than what just happened.
The company delivered adjusted earnings of 80 cents per share for Q4. That beat analyst expectations of 78 cents. Revenue reached $5.29 billion, above the $5.28 billion Wall Street projected, with organic growth of 12.7% year-over-year.
But here’s where things got messy. The first-quarter outlook came in softer than hoped.
Boston Scientific Corporation, BSX
Boston Scientific expects organic growth between 8.5% and 10% for Q1. Analysts wanted to see 9.8%. The earnings forecast of 78 to 80 cents per share also sat at the low end of expectations.
The stock had already been struggling, down 8.7% since October when Barron’s highlighted it as a pick. Wednesday’s drop extended those losses.
Key Division Underperforms
One segment particularly concerned investors. The electrophysiology division generated $890 million in sales during Q4, representing about 17% of total revenue.
That figure missed Stifel’s estimate of $903 million and came up short of the $933 million consensus. Most of the weakness appeared in the U.S. market, though specifics weren’t detailed.
This matters because electrophysiology is a growth driver investors watch closely. When it stumbles, confidence takes a hit.
The earnings beat itself deserves some context. Boston Scientific’s tax rate came in at 9.3% for the quarter. Stifel had modeled 13.5%, meaning the lower taxes provided a boost that operational performance alone might not have delivered.
Year-Ahead Projections Hold Steady
Looking at the full 2026 picture, things appear more balanced. Boston Scientific guided to adjusted earnings of $3.43 to $3.49 per share for the year. Organic growth is projected at 10% to 11%.
Both ranges match what analysts already expected. The guidance suggests management anticipates stronger performance in the back half of the year, given the cautious Q1 outlook.
Fourth-quarter organic growth clocked in at 15.9%, beating Stifel’s 15% estimate. That strong finish makes the projected Q1 slowdown more noticeable.
The company demonstrated strength across most of its business. Revenue of $5.29 billion topped Stifel’s $5.25 billion estimate. The electrophysiology miss was the main blemish on an otherwise solid report.
The implied deceleration from 15.9% organic growth in Q4 to 8.5%-10% in Q1 raises questions. Is this conservative guidance or a sign of cooling demand? Investors will need to wait for more clarity.
The tax benefit that padded Q4 earnings likely won’t repeat at the same level in coming quarters. That means the company needs to deliver operationally to meet expectations going forward.
Boston Scientific’s electrophysiology weakness in the U.S. market stands out as the biggest concern from this report. Whether this represents a temporary issue or something more persistent remains unclear based on the limited details provided.
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