Boston Scientific Calls 2027 The Trough As Watchman And Heart-Rhythm Drags Persist
CEO Mike Mahoney says the medical-device maker will be challenged to grow sales and adjusted EPS in 2027, with 2028 the target for a rebound.
Boston Scientific, the medical-device maker, expects to struggle to grow sales and adjusted earnings per share in 2027, excluding its pending Penumbra acquisition, CEO Mike Mahoney said on the company's Wednesday third-quarter earnings call. Two franchises that powered years of growth, electrophysiology (heart-rhythm ablation) and the Watchman stroke-prevention implant, are now dragging, he said, and management believes 2027 will be the trough of the cycle.
A weak quarter and a lower baseline
Third-quarter revenue of $5,138,000,000 rose 1.5%, against an original guide of 3% to 5%, Mahoney said. Adjusted EPS of 73 cents fell 3%, below the company's 80-to-82-cent range. Management estimates the cyber incident cut sales growth by about 300 basis points (three percentage points) and EPS by 7 cents, with operations back up by September 8 after a two-week outage.
For the fourth quarter, the company guides to organic revenue down 1% to 3% and adjusted EPS of 77 to 79 cents. Full-year 2026 organic growth is now about 3.75% on Chief Financial Officer Jon Monson's figures, with adjusted EPS of $3.16 to $3.18.
Monson said the fourth-quarter outlook "provides a reasonable baseline" for next year's revenue and adjusted EPS, and that EPS should land roughly in line with revenue. Gross margin faces "significant pressure" in 2027, he said, mostly from product mix and China pricing. He also said the company needs to "rebuild confidence in our forecasts."
Watchman and EP carry the 2027 risk
The rest of the business, about 75% of sales, is growing about 6% with roughly a point of China pricing drag, Mahoney said, but not enough to offset Watchman and EP next year.
On Watchman, management assumes no improvement from the fourth-quarter run rate plus a competitive launch in 2027. The underlying market is shrinking about 7% to 8%, and Mahoney said the error bars around that assumption are "quite wide." Watchman sales fell 6% in the quarter, with US standalone procedures down in the high teens.
In EP, sales fell 5%, including an 8% US decline. Mahoney said the company expects continued share erosion to rival pulsed-field ablation technologies until its Farapulse Ultra catheter launches, now expected in early 2028, and that the cyber incident accelerated some share shift.
Restructuring and the road to 2028
Monson said a company-wide restructuring should deliver over $500 million in savings over three years, with over half achieved exiting 2027. Mahoney said the company aims to exit the cycle in 2027, with stronger performance in 2028 and further improvement in 2029, and that launches and market entries will unlock $25 billion in new market opportunity by 2030.
Some pipeline items slipped about six months, Mahoney conceded. The company also signed an agreement with Blackstone Life Sciences to co-fund its Vitalis circulatory-support system for cardiogenic shock, aiming for a 2030 launch.
The Penumbra deal is now expected to close in early 2027, pending remaining regulatory clearances. Monson said full 2027 guidance and gross-margin detail will come on the fourth-quarter call.
Boston Scientific's market value was $65.3 billion in Wednesday morning trading, before the company's full 2027 guide arrives on the fourth-quarter call.
Sources
- Boston Scientific stock drops on duidance cut (BSX:NYSE) | Seeking Alpha — seekingalpha.com
- Boston Scientific (BSX) Q3 Earnings Match Estimates — Yahoo Finance
- Boston Scientific Warned You. It Slashed Earnings Guidance After Cyberattack Hit Its Business. — Barron's
- Boston Scientific announces results for third quarter 2026 — prnewswire.com
