Boston Scientific CFO: 'We Need To Rebuild Confidence In Our Forecasts'
Management owned up to missed guidance and launch slips of about six months, and pointed to a revamped forecasting process.
Boston Scientific CFO Jon Monson told analysts on Wednesday's third-quarter earnings call that the company has to win back trust in its forecasts, after organic sales growth of 1.5% landed well short of an original guide of 3% to 5%. Chairman and CEO Mike Mahoney added that he is unhappy with product-launch delays.
A CFO's admission on forecasting
Boston Scientific, which makes medical devices sold mainly to hospitals and physicians, also posted adjusted earnings of 73 cents a share, below its 80-to-82-cent range. Mahoney said the company's cybersecurity incident cut sales growth by about 300 basis points (three percentage points) and adjusted earnings by 7 cents in the quarter.
Before walking through guidance, Monson said "we need to rebuild confidence in our forecasts," adding that the company has made meaningful enhancements to its process.
Asked by a Bank of America analyst about forecasting, Monson said the company struggled to call the turn in the cycle for electrophysiology and Watchman, the two businesses that had driven years of exceptional growth. The fixes include more sensitivity and scenario analysis, more objective models and more third-party data.
Slips of about six months
Mahoney said 2026 "has not been the year we've executed so well," and described roughly a six-month delay in some big platforms. "We're not happy with some of these slips," he said.
Part of the aim, he said, in splitting the business into sectors and elevating Joe Fitzgerald, the cardiology group president, to a COO role is tighter focus and more dependable launch timing.
Fitzgerald said the Farapulse Ultra delay of about one quarter comes from design verification and validation work on a hardware, software and catheter project that needs no clinical study. He said the FARAFLEX delay traces to negotiations with the FDA over the trial's approval, slight delays in full CMS approval and operational hurdles in adding study sites. A good question for the fourth-quarter call, he said, will be how enrollment in the FARAFLEX study is going.
Guidance and a $500 million savings plan
The company guided to fourth-quarter organic revenue down 1% to 3% and adjusted earnings of 77 to 79 cents, and said it will be challenged to grow revenue and adjusted earnings in 2027, excluding the pending Penumbra acquisition, which it now expects to close in early 2027.
Monson said the company-wide restructuring program should deliver over $500 million of savings over three years, with over half arriving exiting 2027. He said the program is a little ahead of schedule.
Management said it aims to exit the down cycle in 2027 and return to stronger growth in 2028, with further improvement expected in 2029.
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
