Boston Scientific stock slumped Wednesday despite a "big organic revenue beat" driven by strong electrophysiology sales, one analyst said.
Electrophysiology tools allow doctors to study the heart's electrical patterns and activity. In the June quarter, the company says its electrophysiology business generated $428 million in sales.
Organically, sales surged 125% and accelerated from 72% growth in the first quarter and 43% in the fourth, Evercore ISI analyst Vijay Kumar said in a report. That beat Kumar's already lofty calls for electrophysiology sales to double in the quarter, helped by the full commercial launch of a new product called Farapulse PFA, or pulsed field ablation.
"To put this in context, total revenue beat Street by about 250 basis points and electrophysiology beat Street estimates by about $97 million or contributed 270 basis points of the revenue beat," he said. "In other words, excluding electrophysiology, all other franchises were more or less in line and the beat was entirely attributable to electrophysiology."
On the stock market today, Boston Scientific stock shed 1.1% closing 77.76. Shares have been trading at record highs.
Boston Scientific Stock: Big Cardio Growth
Overall, second-quarter sales rose 14.5% on a reported basis to $4.12 billion, beating expectations for $4.02 billion, according to FactSet. Organically, sales grew 14.7%. Adjusted earnings came in at 62 cents a share, rising 17% to top projections by 4 cents per share.
Medical-surgical sales grew 9% to $1.48 billion, in line with analysts' forecasts. Cardiovascular, Boston Sci's other business segment, brought in $2.64 billion in sales, up 17.8% and above expectations.
Kumar kept his outperform rating on Boston Scientific stock.
Boston Scientific raised its outlook for the year and now expects sales to grow 13% to 14% organically, beating forecasts for 11.6% growth, per FactSet. The company also projects adjusted earnings of $2.38 to $2.42 per share, topping analysts' previous projection for $2.33.
Boston Scientific stock has rallied this year and shares have a strong IBD Digital Composite Rating of 95 out of a best-possible 99. This means Boston Sci stock ranks in the leading 5% of all stocks when it comes to fundamental and technical measures.
This story has been updated to reflect correct electrophysiology sales for the second quarter.
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