Boston Scientific Sales Rise 1.5%; Shares Fall 11.9% Before the Open
Key Facts
Boston Scientific reported net sales of $5.138 billion in the third quarter of 2026, up 1.5% on a reported, operational and organic basis from the same period a year earlier, according to the company’s announcement. Adjusted earnings per share were $0.73, compared with $0.75 a year earlier, while earnings per share under U.S. accounting standards fell to $0.40 from $0.51. Sales growth and adjusted earnings per share came in below the company’s previous quarterly guidance, which targeted organic growth of 3% to 5% and adjusted earnings of $0.80 to $0.82 per share. Management acknowledged on the results call that organic sales growth of 1.5% fell short of its original guidance. After the results were announced, shares fell 11.9% in premarket trading on October 28, then closed at $42.43 that day, compared with the previous session’s close of $45.06.
Management attributed part of the quarter’s weakness to the cyber incident, estimating that it reduced sales growth by about 300 basis points, equivalent to about $150 million, and cut adjusted earnings per share by $0.07. The company said the incident caused a two-week disruption and that operations returned to normal on September 8. The expected impact extended into the fourth quarter, with management forecasting sales pressure of 200 to 300 basis points and a negative effect of about $0.04 to $0.05 on earnings per share. Management said the ongoing impact was due to customers using some of the inventory they had rebuilt after the disruption. Unfavorable manufacturing absorption and direct costs also weighed on third-quarter earnings.
The company’s margins declined alongside slower sales growth: adjusted operating margin was 26.5%, down 150 basis points year over year, while adjusted gross margin was 68.0%, down 300 basis points. By business, MedSurg organic growth was 0.7%, compared with 1.9% for Cardiovascular. Performance within MedSurg varied: Endoscopy sales fell 0.6% organically, Urology sales declined 3.1%, and Neuromodulation sales rose 13.0%. The company partly attributed Endoscopy’s weakness to China pricing effects in its gastrointestinal business and to the cyber incident. It also cited pricing pressure in China on its stone-treatment business within Urology.
Boston Scientific lowered its estimate for reported sales growth in 2026 to about 4.25% and organic sales growth to about 3.75%, and set adjusted earnings per share at $3.16 to $3.18. For the fourth quarter, the company expects reported and organic sales to decline between 1% and 3%, with adjusted earnings of $0.77 to $0.79 per share. The year-over-year comparison is significant as fourth-quarter 2025 sales reached $5.286 billion, organic growth was 12.7%, and adjusted earnings were $0.80 per share. The chief executive said some of the underlying business dynamics seen in the fourth quarter are expected to continue through 2027. He added that the company would issue its guidance for that year in January.
Commenting on the results, Chief Executive Mike Mahoney said he remained confident in the company’s long-term strategy, citing its employees, product portfolio and innovation pipeline. He said, "I remain confident in our long-term strategy, supported by our dedicated talent, differentiated portfolio and strong pipeline of meaningful innovations." The assurance came as the company lowered its annual sales growth estimate and forecast a sales decline in the fourth quarter. On the completion of the Penumbra acquisition, Mahoney said the company remained confident it would close the deal, with completion expected at the beginning of the first quarter of 2027 after the regulatory process took longer. The company is expected to provide its 2027 guidance figures in January.