Boston Scientific Earnings Preview

Boston Scientific will likely deliver earnings results that disappoint Wall Street this quarter and could possible even swing to a loss.

 

Boston Scientific [[BSX]] is scheduled to report their second quarter 2010 results after the market closes on Tuesday, July 20.

 

Boston Scientific has struggled with meeting Wall Street’s expectations recently. Last quarter, the medical device maker did report earnings results that were $.02 above Wall Street’s consensus estimates. However, BSX shares fell 2% as litigation concerns and a $1.8 billion goodwill impairment weighed on the stock.

 

The current Wall Street consensus estimates are for revenues of $1.91 billion and EPS of $.03. This would imply an 8% decline in revenues from last year’s $2.07 billion. Earnings are expected to decline 77%. 

 

Boston Scientific shares have fallen 27% this year and have badly underperformed the 3% decline in the S&P 500 index. Last year BSX shares gained 16%, but still underperformed the 23% gain in the S&P 500.

 

Boston Scientific stock is currently trading at 16x consensus 2011 EPS estimates. There is a real risk that Boston Scientific could report a loss this quarter. Regardless, the shares have significant risk and don’t offer a compelling valuation.

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