Shares of Boston Scientific Corp. continued climbing Wednesday, a day after the medical device maker topped analyst expectations with its fourth-quarter earnings report.
THE SPARK: The Natick, Mass., company said Tuesday that it earned 18 cents per share in the fourth quarter, not counting restructuring and litigation charges, while its revenue slipped 1 percent to $1.82 billion.
Analysts had expected, on average, earnings of 11 cents per share on $1.76 billion in revenue, according to FactSet.
The company also issued a forecast for 2013 earnings that topped analyst expectations.
THE BIG PICTURE: Counting the restructuring and litigation charges, Boston Scientific's net income shrank 44 percent to $60 million, or 4 cents per share, compared to the final quarter of 2011.
The company also said Tuesday it was cutting up to 1,000 jobs as it deals with challenges that include a new medical device tax from the U. S. health care overhaul, limited growth prospects in certain markets and pressure to cut prices on its products in other countries.
Boston Scientific expects to reduce annual operating expenses, before taxes, by about $340 million to $375 million by the end of this year. That includes savings from a restructuring plan it started in 2011 as well as from the additional cuts it announced Tuesday.
The job cuts announced Tuesday are in addition to the 1,200 to 1,400 cuts the company announced in 2011.
THE ANALYSIS: Boston Scientific turned in its strongest quarter in several years, Stifel Nicolaus analyst Rick Wise said in a research note, adding that the results imply stabilizing market growth for the company.
He noted that new and upcoming products should help the company's revenue, its expanded restructuring plan will help save money, and a new $1 billion share buyback authorization will allow the company to retire an additional 10 percent of its outstanding shares.
SHARE ACTION: Up 3 percent, or 21 cents, to $7.31 in afternoon trading, while the Standard & Poor's 500 index fell slightly. The stock's price hit a 52-week high of $7.43 on Tuesday, after earnings were announced. It has climbed more than 20 percent so far this year.