We recently reiterated our Neutral rating on Boston Scientific Corp. (BSX) with a target price of $8 based on a P/E of 18.6x our fiscal 2010 EPS estimate of 43 cents.

Boston Scientific reported strong fourth quarter and fiscal 2009 results. For the fourth quarter, earnings per share came in at 20 cents, beating the Zacks Consensus Estimate of 13 cents and the year-ago figure of 12 cents. For fiscal 2009, earnings per share came in at 78 cents, surpassing the Zacks Consensus Estimate of 50 cents and the year-ago figure of 58 cents.

Total revenues in the fourth quarter increased 4% year-over-year to $2.08 billion. Cardiac Rhythm Management (CRM) revenues increased 6% year-over-year to $645 million. Within this, implantable cardioverter defibrillator (ICD) sales increased 5.2% year-over-year to $449 million. Pacemaker system sales increased 9.7% year-over-year to $158 million.

Cardiovascular revenues declined 1% year-over-year to $871 million. Within this, total coronary stent system sales declined 4.8% year-over-year to $453 million. Endosurgery revenues increased 13% year over year to $392 million.

Boston reported fiscal 2009 total sales of $8.19 billion, an increase of 2% year over year. CRM revenues increased 5% year-over-year to $2.56 billion, fueled by higher sales of ICD and pacemakers.

Boston maintained its leadership in the drug-eluting stent market with a 39% global market share. Drug-eluting stent revenues increased 4.5% year-over-year to $1.71 billion in fiscal 2009. Endosurgery sales increased 6% year-over-year to $1.46 billion.

Geographically, the U.S. contributed roughly 57% to fiscal 2009 revenues and increased 4% year over year. International revenues were approximately flat year over year.

Boston Scientific manufactures medical devices and products used in a broad range of interventional medical specialties. The company faces significant competition across its product portfolio. The primary competitors include Johnson & Johnson (JNJ), Medtronic Inc. (MDT), Abbott Laboratories (ABT) and St. Jude Medical Inc. (STJ).

Zacks Investment Research

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