CHICAGO – Guidant Corp. (GDT), the heart device company that agreed this week to be acquired by Boston Scientific Corp. (BSX), on Friday posted lower quarterly earnings as sales of its profitable implantable defibrillators dropped 19 percent following a wave of recalls in midyear.
Weakness in Guidant's defibrillator sales comes amid fresh problems for Boston Scientific, which on Thursday received a sweeping warning from the U.S. Food and Drug Administration about "serious" deficiencies in its medical device plants.
Shares of Boston Scientific dipped in premarket trading on Inet to $21.75, which is below the key level of $22.62. Under the terms of the deal, Guidant shareholders will receive $80 per Guidant share in cash and Boston Scientific stock. If Boston Scientific's stock falls below $22.62 within three days of the deal closing, the value of the deal would be lower.
Indianapolis-based Guidant also reaffirmed its January 10 outlook for 2006, forecasting earnings per share between $1.48 to $1.58, on sales of $3.8 billion to $4.0 billion.
In the fourth quarter, Guidant said its income from continuing operations was $85.4 million, or 25 cents per share, 2 cents below the consensus estimate on Wall Street, according to Reuters Estimates. In the year ago period, earnings from continuing operations were $123.7 million, or 38 cents per share.