Boston Scientific hoping to expand

Boston Scientific Corp will reserve most of the $1 billion (€760 million) in free cash it expects to generate in 2012 for acquisitions, with plans to use 25% to buy back shares, chief financial officer Jeff Capello said.

The company plans to purchase new technologies to help drive growth into the “mid-single digits,” Capello said. Boston Scientific, the second-biggest heart device manufacturer, reported yesterday that net income plunged 55% to $107m, or 7 cents a share, in the fourth-quarter as sales fell 7.7%.

Boston Scientific repurchased close to $500m in stock during the second half of 2011, said Denise Kaigler, a spokeswoman for the Massachusetts-based firm. The device maker will use $250m for buybacks. What it does with the remainder will depend on what technologies are available and their price, Capello said.

“I think you’re going to see us get a little bit more aggressive from the business development perspective to try to drive some new technologies into the business to drive the revenue growth,” he said.

Demand for defibrillators and pacemakers, two of Boston Scientific’s biggest products, continued to fall in the fourth quarter after peaking in 2009. Sales failed to meet analyst estimates for the company’s cardiac devices and global markets may have contracted, casting doubt on a demand revival, said Michael Matson, an analyst with Mizuho Securities USA Inc in New York.

“Boston’s implantable cardioverter defibrillator franchise continues to underperform in a struggling market,” said Michael Weinstein, a JPMorgan Chase & Co analyst in New York.