Created: 01/29/2013 3:55 PM KSTP.com By: Leslie Dyste
Twin Cities based Boston Scientific plans to cut as many as 1,000 additional jobs this year as the medical device maker expands a push to reduce operating expenses.
The company's shares jumped in morning trading Tuesday, as it also reported a fourth-quarter profit and earnings outlook that topped Wall Street expectations.
The 900 to 1,000 cuts will include layoffs as well as the elimination of unfilled positions. They come on top of a restructuring plan, started in 2011, that included 1,200 to 1,400 job cuts. The Natick, Mass., employs roughly 24,000 people worldwide, so total cuts could amount to 10 percent of the company's jobs. Boston Scientific hasn't decided where the additional cuts will be made, said spokesman Steven Campanini.
The company said Tuesday that its fourth-quarter net income shrank 44 percent to $60 million, or 4 cents per share, as it absorbed charges for restructuring and litigation. Not counting these charges, earnings were 18 cents per share. Revenue slipped 1 percent to $1.82 billion.
Analysts forecast, on average, earnings of 11 cents per share on $1.76 billion in revenue, according to FactSet.
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 expected savings of $100 million to $115 million from the additional restructuring measures announced Tuesday.
For the year, Boston Scientific expects adjusted earnings of 64 to 70 cents per share on revenue of $7.05 billion to $7.35 billion. Wall Street predicted profit of 43 cents per share on revenue of $7.11 billion.
In the current quarter, Boston Scientific expects adjusted profit of 14 to 17 cents per share on revenue of $1.74 billion to $1.82 billion. Analysts expected profit of 10 cents per share on revenue of $1.79 billion.
The company's shares climbed nearly 6 percent, or 41 cents, to $7.27 in Tuesday morning trading. The stock peaked earlier in the morning at a 52-week high of $7.43.
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