Boston Scientific Bullish on 2025 Despite $200M Tariff Impact

Boston Scientific, a leading medical device manufacturer, has expressed optimism for its 2025 outlook despite facing a significant $200 million impact from tariffs imposed by the Trump administration. The company joins other industry giants such as Johnson & Johnson and Abbott in forecasting substantial financial effects from these trade policies.

Strong Q1 Performance and Raised Guidance

Boston Scientific reported impressive first-quarter results, with sales reaching $4.66 billion, representing a nearly 21% increase year over year. The company's net income rose to $674 million, up from $495 million in the same period last year. Notably, the electrophysiology segment saw exceptional growth, with sales soaring by approximately 143% to $730 million.

In light of these strong results, CEO Mike Mahoney announced during an earnings call that Boston Scientific has raised its 2025 guidance. The company now expects growth in the range of 15%-17% on a reported basis, up from the previous projection of 12.5%-14.5%. This upward revision comes despite the anticipated $200 million tariff hit.

Navigating Tariff Challenges

The $200 million tariff impact is expected to primarily affect Boston Scientific in the second half of 2025, with the largest component attributed to U.S.-China trade tensions. CFO Dan Brennan, who announced his retirement on the same day as the earnings call, expressed confidence in the company's ability to offset these costs through sales growth and strategic measures such as reducing discretionary spending.

Mahoney emphasized the company's unique position to absorb the tariff impact, stating, "Our ability to absorb the tariffs, I think, is more unique than most companies, given the strength of growth and the leverage that we're driving to absorb the $200 million, which is unfortunate. But we're able to absorb it and still deliver a very high performance."

Industry-Wide Tariff Effects and Global Operations

Boston Scientific is not alone in facing tariff-related challenges. Johnson & Johnson anticipates a $400 million charge from tariffs, while Abbott expects an impact of "a few hundred million dollars." Danaher Corporation has predicted an approximately $350 million tariff hit, though CEO Rainer Blaine suggested that the situation may evolve.

Despite these pressures, Boston Scientific remains committed to its global manufacturing strategy. Mahoney indicated that the company does not plan any major manufacturing changes in response to the tariffs, stating, "Our manufacturing footprint makes the most sense for the long term, and we'll continue to invest in that to grow." The company has recently expanded its operations with a new site in Georgia, increased capacity in Minnesota, and investments in Malaysia.

Furthermore, Boston Scientific expects to maintain double-digit sales growth in China, which represents approximately 7-8% of its total sales, even in the face of tariffs and other economic challenges such as value-based purchasing.