Published October 24, 2013
Boston Scientific (BSX) announced plans on Wednesday to axe up to 1,500 positions worldwide as it looks to reduce overall costs, and it still expects to report weaker-than-expected revenues for the full year.
The Natick, Mass.-based medical-device maker says it will begin cutting 1,100 and 1,500 jobs at the end of this year through a combination of employee attrition and targeted layoffs.
The overall restructuring program, expected to run through the end of 2015, will result in charges of about $175 million to $225 million, but lead to as much as $150 million to $200 million in annual savings.
The widened overhaul comes as Boston Scientific reports mixed third-quarter earnings and backs its full-year outlook that has sales falling short of expectations.
Revenue for the three months ended Sept. 30 were flat at $1.74 billion, virtually matching average estimates in a Thomson Reuters poll, while the company’s net loss shrunk to $5.0 million from $664 million a year ago.
Excluding special costs, it earned 17 cents, topping the Street’s view of nine cents.
"We are pleased with our strong overall results and the momentum we are building globally in a dynamic healthcare environment," Boston Scientific CEO Mike Mahoney said in a statement.
However, looking toward the remainder of the year, the company offered mixed views.
In the fourth quarter, Boston Scientific sees adjusted earnings in the range of 18 cents to 20 cents, above the Street’s view of 14 cents, with sales of $1.78 billion to $1.83 billion falling mostly below the Street’s view.
For the full year, it anticipates non-GAAP earnings of 69 cents to 71 cents, above the consensus view of 44 cents, with revenue of $7.08 billion to $7.13 billion also coming in below analyst expectations.
Shares of Boston Scientific were down 4.3% to $11.75 in recent trade.
Meanwhile, the company says its chief financial officer, Jeff Capello, is stepping down to take on a wider range of responsibilities. Effective Jan. 1, he will become member of Boston Scientific's executive committee reporting directly of Mahoney.
Daniel Brennan, currently the company's senior vice president and corporate controller, will be promoted to CFO.