UPDATE 2-Boston Scientific profit up, shares jump

Boston Scientific Corp (BSX.N) said on Monday its quarterly net earnings rose 61 percent, topping expectations, on strong demand for its heart devices, sending its shares up 7 percent in after-hours trading.

Both of the medical device maker's key cardiac products -- stents to treat clogged arteries and implanted defibrillators to correct racing heartbeats -- posted solid results.

"They're defending their drug-eluting stent franchise and they're getting their cardiac rhythm management businesses back to growth, and that's pretty much what they promised and what they delivered," said Jeff Jonas, a healthcare analyst with Gabelli & Co.

Medical device makers that make products to treat life- threatening conditions such as heart disease have weathered the recession fairly well and analysts believe Boston Scientific has been taking market share in implantable cardioverter defibrillators from rival Medtronic Inc (MDT.N).

"We were expecting strong ICD sales and we got them. We expected their share to be maintained in the drug-eluting stent business and it was. There is continued positive momentum with this company, no question about it," said Tim Nelson, a healthcare analyst with First American Funds.

Boston Scientific said its second-quarter net income rose to $158 million, or 10 cents a share, from $98 million, or 7 cents a share, a year ago.

Excluding special items, the Natick, Massachusetts-based company said it earned $297 million, or 20 cents a share.

Analysts on average expected earnings before items of 14 cents a share, according to Reuters Estimates.

Second-quarter net sales increased 7 percent to $2.074 billion, excluding the impact of currency translation.

"We delivered sales and earnings at the high end of our guidance range with almost all businesses and regions reporting solid results," Ray Elliott, who this month replaced James Tobin as Boston Scientific's chief executive, said in a statement.

Worldwide sales of the company's cardiac rhythm management products, which include ICDs and pacemakers, rose to $609 million in the second quarter from $578 million in the same period a year ago.

Drug-eluting stent sales rose to $441 million from $382 million a year ago. Boston Scientific said it maintained its leadership position in stents, with 50 percent of the U.S. market, where it competes against Johnson & Johnson (JNJ.N) and newer rivals Medtronic and Abbott Laboratories (ABT.N). link...