Medical device maker Boston Scientific Corp. said Wednesday it posted a small first-quarter profit against a year-earlier loss, when the company's results were hurt by a $1.8 billion write-down.
Sales of implants and devices fell 2 percent to $1.93 billion from $1.96 billion in the first quarter of 2010. The Natick, Mass.-based company specializes in implantable pacemakers, defibrillators and stents, which have all been pressured by hospital cost-cutting and safety concerns in recent years.
CEO Ray Elliott acknowledged the "increasingly challenging" U.S. market for heart devices in the company's release, but pointed to progress in reducing debt and increasing sales in emerging markets.
In the first three months of the year, the company earned $20 million, or 1 cent per share. The company's results were pressured by more than $316 million in one-time expenses, including a write-down on its defibrillator business.
Those results were still an improvement over the prior-year period, when the company reported a net loss of $1.59 billion, or $1.05 per share, due to a $1.8 billion write-down on its business.
When one-time events were excluded, the company earned $336 million, or 22 cents per share.
Analysts polled by FactSet expected earnings of 6 cents per share and revenue of $1.9 billion.
The company raised its full-year earnings estimate by 8 cents per share, based on its first-quarter performance. The company now expects full-year earnings excluding items in the range of 58 to 68 cents per share, up from 50 to 60 cents per share.
Company shares rose 27 cents, or 3.8 percent, to $7.35 in after-hours trading. The stock advanced 5 cents to close at $7.08 in the regular session before the earnings were released.
Boston Scientific has struggled for years to pay down its debt amid declining sales of its best-selling devices. The company is still paying off its massive 2006 acquisition of defibrillator maker Guidant for $27 billion. At the same time, sales of defibrillators and stents have been hit by safety concerns and cutbacks by hospitals reeling from the weak economy.
Elliott, who joined the company in 2009, has tried to reposition Boston Scientific by cutting 10 percent of the work force and restructuring the company.
Earlier this year the company sold its neurovascular business for $1.5 billion. Boston Scientific has also acquired six smaller firms in the last six months, including brain stimulation firm Intelect Medical. Those acquisitions are expected to add more than 150 new products to the company's pipeline by 2015.
But for now, sales of the company's best-selling implantable defibrillators continue to slide.
Defibrillators are surgically implanted in the upper chest, where they monitor the heart for deadly irregular heartbeats and use electrical jolts to shock it back to a normal rhythm.
Sales of the company's cardiac rhythm management devices _ which includes pacemakers as well as defibrillators _ increased 4 percent to $339 million.
That figure benefited by comparison to the prior-year period, when the company lost an estimated $72 million in sales due to a month-long shipment hold on the company's best-selling defibrillators. The company temporarily halted sales of the devices in mid-March due to a regulatory issue involving the manufacturing procedures.
Sales of stents fell 13 percent to $193 million as the company competed with rivals Abbott Laboratories, Johnson & Johnson and Medtronic Inc. Stents are mesh-wire tubes used to prop open arteries after they have been cleared of dangerous plaque.
Despite the drop in sales, Boston Scientific said that it holds 46 percent of the U.S. market for drug-coated stents _ the most widely-used variety _ and 36 percent of that market worldwide.