October 20, 2010 / 12:31 AM / in 7 years

UPDATE 3-Boston Scientific profit beats expectations

* Q3 EPS of 12 cents vs 6 cents estimate

* Q3 sales fall 5 percent to $1.92 billion

* Forecasts Q4 earns excl items of 15 cents to 18 cents

* Shares rise in after-hours trading (Adds segment details, CEO and analyst comments, byline)

By Susan Kelly

CHICAGO, Oct 19 (Reuters) - Boston Scientific Corp BSX.N on Tuesday posted better-than-expected quarterly earnings as a slump in sales of its medical devices was less severe than feared, and its shares rose after-hours.

Wall Street’s expectations had been modest, reflecting a broad slowdown in demand for medical procedures as more patients skip doctor visits in the lengthy economic downturn and hospitals push back on pricing.

“Expectations were low. They did well across the board, across the different businesses, despite all the doom and gloom we’ve been hearing about pricing and slow procedure volumes,” said Gabelli & Co healthcare analyst Jeff Jonas.

Still, the world’s second-largest maker of heart devices said its worldwide sales of stents to treat clogged coronary arteries dropped 12 percent from a year ago. Sales of implantable heart defibrillators declined about 9 percent, and pacemaker sales also fell about 12 percent.

“The plane is still descending. It’s just not descending as fast,” said Jefferies & Co analyst Raj Denhoy.

Boston Scientific, whose shares are languishing near 15-year lows, is in the midst of a turnaround effort that has meant a sharper focus on controlling expenses and includes plans for both divestitures and acquisitions.

The company said its third-quarter net income was $190 million, or 12 cents a share, including restructuring charges and amortization expense. That compares with a net loss of $94 million, or 6 cents a share, a year ago, when hefty special items hurt results.

Analysts had expected the company to earn 6 cents a share in the latest quarter, according to Thomson Reuters I/B/E/S.

Net sales fell 5 percent to $1.92 billion in the quarter, from $2.03 billion a year ago.

“Volumes were down again this quarter, and there’s no doubt the economy played a role,” Boston Scientific Chief Executive Ray Elliott said on a conference call with analysts.

Boston Scientific said it remained the largest maker of drug-eluting stents, with a 37 percent share of the worldwide market, despite continued share gains by competitor Abbott Laboratories’ ABT.N Xience stent.

ICD sales recovered more ground than expected after the company took its products off the market for one month in the spring after discovering it had failed to notify U.S. regulators about some changes to its manufacturing practices.

Sales of neuromodulation, endoscopy, urology and women’s health products grew at mid- to high-single-digit rates.

The Natick, Massachusetts-based company forecast fourth-quarter net earnings of 5 cents to 9 cents a share, and earnings, excluding charges and amortization expense, of 15 cents to 18 cents a share. It forecast fourth-quarter net sales of between $1.925 billion and $2.0 billion.

Boston Scientific shares rose to $6.16 in after-hours trading from a close of $5.97 on the New York Stock Exchange.

Analysts said investors are likely to remain cautious about jumping into the stock until hearing more about the company’s plans for reaccelerating growth at an investor meeting next month.

“I think investors will still stay on the sidelines. People want to get comfortable with where they are going and how they are going to derive growth,” said Noble Financial analyst Jan Wald. (Reporting by Susan Kelly; Editing by Bernard Orr and Carol Bishopric)

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