ANALYST: BOSTON SCIENTIFIC EARNINGS WON'T BE AFFECTED BY REALLOCATION

The recently announced reallocation by Boston Scientific of its cardiac rhythm management (CRM) research and development resources should not affect earnings, an analyst says.

The reallocation, announced by the firm Jan. 8, will include 500 to 600 jobs cuts in the firm's CRM division during the first quarter. The majority of the job losses will occur at its CRM facility in Arden Hills, Minn. Boston Scientific currently employs nearly 29,000 people worldwide.

The reallocation plan "is expected to result in after-tax costs of approximately $70 million, which include change-in-control payments related to last year's acquisition of Guidant by Boston Scientific," the firm said. "The plan is designed to regain market share and builds on the initiative begun last year to restore trust and confidence" in Boston Scientific's CRM products.

"Given the expected reinvestment resulting from the savings, which will include new R&D positions in needed functions, we don't expect a meaningful impact on earnings" from the reallocation, Merrill Lynch Research analyst Katherine Owen wrote in a Jan. 8 research note.