Boston Scientific has reported increased profits attributed to cost-cutting measures for the first quarter, which ended March 31.
The company reported a net income of $322 million for the first quarter of 2008, compared with a profit of $120 million from the first quarter of 2007. The reported results included net charges (after-tax) of $35 million, for acquisition and restructuring-related charges and amortization expense, net of divestiture-related gains, which consisted of:
- $250 million gain (pre-tax), $114 million (after-tax), associated with the sale of five non-strategic businesses;
- $13 million of purchased R &D (pre-tax), $8 million (after-tax);
- $44 million of charges (pre-tax), $32 million (after-tax), associated with the company's expense and head-count reduction initiatives; and
- $143 million of amortization expense (pre-tax), $109 million (after-tax).
As the company noted, the profits were gained through shedding some of its business lines and its previously announced plans to cut 2,300 jobs, or 8 percent of its workforce in October 2007.
However, the Natick, Mass.-based company said that net sales for the first quarter of 2008 were $2.05 billion, including sales from divested businesses of $32 million, as compared to $2.09 billion for the first quarter of 2007, including sales from divested businesses of $135 million.
“We continued to make good progress during the quarter, particularly in our efforts to bring expenses in line with revenues,” said Jim Tobin, president and CEO of Boston Scientific. “Our earnings benefited from our ongoing expense management and were also helped by favorable tax items. Despite the arrival of a third DES [drug-eluting stent] competitor in the United States, we held our leadership positions in both the U.S. and worldwide markets.”
Worldwide sales of its DES systems for the first quarter of 2008 were $428 million, as compared to $468 million for the first quarter of 2007, Boston Scientific said. The U.S. sales of these systems were $218 million, as compared to $293 million, according to the company. However, international sales of the systems were $210 million, as compared to $175 million, which shows the one increase in DES sales.