Secrets of the Job Hunt


Monday, August 18, 2008

Medical Device Company Recovering From Job Cuts in Boston

One company that cut many Boston jobs at the end of 2007 is starting to recover.

Cost and job cuts at Boston Scientific have helped the company rebound from two consecutive quarterly losses, according to an article by the Associated Press.

The company, which produces medical devices, had earned a net income of $322 million in the first quarter of the year, higher than last year's net income of $120 million. Sales decreased to $2.05 billion from $2.09 billion last year.

The company's profits so far this year come on the heels of a $272 million loss in last year's third quarter and a $458 million loss in last year's fourth quarter. This is partially attributed to Boston Scientific's acquisition of Guidant Corp. in 2006 that increased the company's debt.

The company was only able to regain some ground as it announced in October 2007 it would cut 2,300 jobs, about 8 percent of its workforce, as well as some business ties. More than half of the cuts have been completed, and the company has been able to reduce its debt by $1.7 billion to $5.8 billion.

While Boston Scientific has been recovering from major losses, it is still seeing a decrease in the stent and implanted defibrillator production, which accounts for about half of the company's sales and more than half of the company's profits.

Sales of the company's drug-coated stents fell nearly 9 percent to $428 million in this year's first quarter from $468 million. Sales of implanted defibrillators rose 3 percent in the first quarter to $411 million from $398 million.

"The latest quarter's profit was clouded by one-time charges and tax gains from the asset sales and job cuts," the article notes. "The biggest were a $114 million after-tax gain from asset sales and $143 million in after-tax amortization expense. Excluding such items, Boston Scientific's profit (in April) was $357 million, or 24 cents per share."

It was expected the company would post a second-quarter profit of 14 cents to 19 cents per share, excluding one-time items, on sales of $1.95 billion to $2.075 billion. Analysts expected a profit of 12 cents per share on sales of $2.02 billion.

No comments: