The Wall Street Journal-20080205-Boston Scientific Posts Loss

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Boston Scientific Posts Loss

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Boston Scientific Corp. reported a loss of $458 million, or 31 cents a share, in the fourth quarter, weighed down by write-downs, layoffs and an unfavorable patent ruling.

That fell short of earlier earnings guidance from the company. But excluding the charges, the company said its per-share profit beat its forecasts, giving investors hope of a turnaround after a year marked by regulatory, legal and scientific setbacks. Boston Scientific is still under probation from the Food and Drug Administration that has held up introduction of its next-generation heart stent in the U.S.

The company predicted net income this quarter of 13 to 18 cents a share on $1.96 billion to $2.08 billion. In the first quarter of 2007, it earned eight cents a share on revenue of $2.09 billion.

Shares rose 3%, or 40 cents, to $13.25 in after-hours trading on the Nasdaq Stock Market. They closed regular trading at $12.85, up 3.9%, before the company's earnings announcement.

Sales in the latest period grew 4.2%, hitting the top end of a range the company had forecast in October. But a series of charges pulled Boston Scientific into the red. Sales of implantable defibrillators were $396 million, 11% higher than last year, but still 17% below 2005, before a series of defects and recalls.

Coronary stents marked their worst quarter in several years, with $496 million in sales. The company recorded a $365 million charge in predicted losses from patent litigation in its stenting and angioplasty business. In November, rival Johnson & Johnson won a jury verdict against Boston Scientific involving balloons used to expand clogged arteries. The company declined to clarify whether that resulted in the charge. Boston Scientific also recorded charges of $184 million for layoffs and $208 million from writing down the value of businesses it is divesting itself of.