Boston Scientific shares fall to 52-week low
Shares of Boston Scientific Corp. dropped to a 52-week low today a day after the involuntary sell-off of 13 million shares by the medical device firm's co-founders.
Shares of the Natick-based company fell 70 cents, or 7.8 percent, to $8.25 in trading today on the New York Stock Exchange. A day earlier, shares fell 10 percent.
Boston Scientific said the earlier decline was impacted by involuntary trading by the company's co-founders, and did not reflect on the company performance. Management warned that more involuntary selling brought on by the global financial meltdown is possible "in the near future."
Analysts yesterday also digested news of two one-time charges the company will take in the third quarter: $334 million in payments to Johnson & Johnson connected with an unsuccessful patent dispute, and a charge of between $140 million and $180 million from the impairment of intangible assets.
The company said those losses would be partially offset by $265 million in gains from milestone payments and public and private investments.
RBC Capital Markets analyst Phil Nalbone slashed his earnings estimate for the quarter from a gain of 22 cents per share to a loss of 5 cents per share. Excluding one-time charges and gains he reiterated earnings between 16 and 18 cents per share.
Analysts polled by Thomson Financial expect a profit of 11 cents per share, when the company reports earnings next Thursday.
Nalbone maintained a "sector perform" rating on the stock with a $14 price target, but recommended investors "put money into higher-quality, beaten-up names in the sector," such as Abbott Laboratories, Medtronic Inc. and Johnson and Johnson.
Morgan Stanley analyst David Lewis said the charges would leave the company's balance sheet in "less than ideal" position. But he noted the company paid down $500 million of debt in the last quarter and does not have another payment due until 2010.
The drop followed an earlier sell-off Wednesday, when shares dropped 10 percent. The company said the decline was affected by the involuntary trading. (AP)
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