Boston Scientific (BSX) Stock: Why Shares Drop 8% Despite Earnings Beat

TLDR

• Boston Scientific reported Q4 adjusted earnings of 80 cents per share, beating analyst estimates of 78 cents
• Net sales reached $5.29 billion with 12.7% organic growth, slightly above Wall Street expectations
• Q1 guidance disappointed with projected growth of 8.5% to 10% versus analyst expectations of 9.8%
• Electrophysiology division underperformed with $890 million in sales versus consensus expectations of $933 million
• Stock dropped 8.4% in premarket trading despite the earnings beat

Boston Scientific shares took a beating Wednesday morning despite posting better-than-expected fourth-quarter results. The culprit? Weak guidance for the current quarter and disappointing performance in a key division.

The medical device maker reported adjusted earnings of 80 cents per share for the fourth quarter. That topped the Street’s call for 78 cents. Net sales came in at $5.29 billion, representing 12.7% organic growth year-over-year and edging out the $5.28 billion analysts were expecting.

Boston Scientific Corporation, BSX

So why the selloff? The first-quarter outlook fell short of expectations.

Boston Scientific projects organic growth of 8.5% to 10% for the current quarter. Analysts had penciled in 9.8% growth. The company also forecast adjusted earnings of 78 cents to 80 cents per share for Q1, at the low end of what Wall Street wanted to see.

Shares plunged 8.4% in premarket trading following the announcement. The stock had already declined 8.7% since being featured as a Barron’s stock pick in October.

Electrophysiology Division Falls Short

The weakness wasn’t uniform across all business segments. The electrophysiology division, which accounts for roughly 17% of fourth-quarter revenues, missed expectations by a wide margin.

The division posted sales of $890 million. That came in well below the consensus estimate of $933 million and Stifel’s projection of $903 million. The shortfall appears concentrated in the U.S. market, raising questions about demand trends.

Electrophysiology is a closely watched segment for Boston Scientific. The miss there likely contributed to investor concerns about near-term momentum.

The earnings beat itself came with an asterisk. Boston Scientific benefited from a lower-than-expected tax rate of approximately 9.3%. Stifel had modeled a rate of 13.5%, meaning the bottom-line beat was more about tax benefits than operational outperformance.

Full-Year Outlook Meets Expectations

The picture looks brighter when zooming out to the full year. Boston Scientific guided to adjusted earnings of $3.43 to $3.49 per share for 2026. The company expects organic growth of 10% to 11% for the year.

Both ranges align with consensus estimates. The guidance suggests Boston Scientific expects growth to accelerate in the second half of the year, given the slower start projected for Q1.

Organic revenue growth reached 15.9% in the fourth quarter, surpassing Stifel’s projection of 15%. That strong finish to 2025 makes the Q1 guidance look more conservative by comparison.

Total fourth-quarter revenue of $5.29 billion beat Stifel’s estimate of $5.25 billion. The company demonstrated solid performance across most of its portfolio, with the electrophysiology division being the main exception.

The tax rate for the quarter came in at 9.3%, well below typical levels and analyst expectations. That tailwind boosted earnings but may not be sustainable in future quarters.

Boston Scientific’s Q1 organic growth guidance of 8.5% to 10% implies a deceleration from the 15.9% pace in Q4. The company appears to be building in conservatism or facing tougher comparisons in the near term.

The electrophysiology division’s U.S. weakness particularly stands out given the segment’s importance to the overall growth story. Investors will be watching closely to see if this represents a temporary blip or a more sustained trend.

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