Two powerhouse medical-device companies reported fourth-quarter declines in revenue, and in one case, a multibillion-dollar net loss, according to newly released earnings reports.
The companies, spine- and cardiac-device maker Boston Scientific Corp. and orthopedic-device maker Zimmer Holdings, both attributed the declines in part to unfavorable foreign-currency exchange rates. Boston Scientifics 2008 fourth-quarter revenue was $2 billion compared with $2.2 billion during the year-ago period. Zimmer posted revenue of $1.03 billion during its most recent quarter compared with $1.07 billion during the same quarter of 2007.
Both devicemakers also said acquisitions of other companies significantly affected their profitability during the final quarter of 2008. Boston Scientific took a one-time $2.7 billion write-down related to the falling value of its cardiac-rhythm management business, which it acquired with the purchase of Guidant in 2006. The devicemaker reported a $2.4 billion net loss for the quarter ended Dec. 31, 2008, compared with a $458 million loss during the fourth quarter of 2007.
Zimmer officials said the purchase of Abbott Spine in October 2008 also affected its profit during the final quarter of 2008. The company reported a 37% drop in profit during its most recent quarter. Zimmer posted $167.5 million in profit during the fourth quarter of 2008 compared with $264 million during the fourth quarter of the previous year.