UPDATE: St. Jude Medical 1Q Profit Hit By Charges; Guidance Up
April 20 2011 - 10:41AM
Dow Jones News
St. Jude Medical Inc.'s (STJ) first-quarter earnings fell 2.2%,
nicked by acquisition-related charges, but sales improved amid
gains in all of the company's major medical-device product
categories.
The St. Paul, Minn., company boosted its full-year earnings and
sales guidance Tuesday while issuing second-quarter forecasts that
bracket Wall Street's expectations.
St. Jude has managed to outpace sluggish growth in a market for
implantable defibrillators, which is the company's biggest
business, with help from new products. It competes closely there
with Medtronic Inc. (MDT) and Boston Scientific Corp. (BSX).
St. Jude's defibrillator sales grew only 3% in the first
quarter, but the company was comparing against a period last year
when it picked up $25 million in sales from Boston Scientific,
which temporarily stopped selling defibrillators in the U.S. while
it sorted out some regulatory paperwork issues. Without that
impact, St. Jude said its defibrillator sales were up 9%.
St. Jude is pumping up spending on its product pipeline this
year and is making "good progress developing the new growth drivers
we need to return to double-digit" percentage growth on a sustained
basis, Chairman and Chief Executive Daniel Starks said during a
conference call.
St. Jude shares recently traded up 3.5% to $52.80, and are up
nearly 29% over the last 12 months. The company recently announced
a new quarterly dividend of 21 cents a share.
St. Jude reported a profit of $233.4 million, or 71 cents a
share, down from $238.6 million, or 73 cents, a year earlier.
Excluding items such as charges related to the company's
acquisition of AGA Medical Holdings and tax benefits, earnings rose
to 80 cents from 75 cents.
Analysts surveyed by Thomson Reuters had forecast, on average,
earnings of 78 cents a share in the recent quarter.
Revenue climbed 9% to $1.38 billion, about matching Wall Street
expectations. Favorable currency rates added about $17 million.
Sales in the company's heart-rhythm business, which includes
pacemakers and defibrillators, inched up 1% to $762 million. The
sluggish growth reflects both a sales decline for pacemakers and
last year's bonus defibrillator sales pegged to Boston Scientific's
issues. Overall heart-rhythm sales were within the company's
forecasted range.
Sales of systems used to treat the rhythm disorder atrial
fibrillation rose 15% to $195 million, topping the company's
expectations. Sales of cardiovascular products, which now include
products from AGA Medical, rose 28% to $327 million.
Sales of neuromodulation products increased 10% to $92
million.
St. Jude raised the top and bottom ends of its adjusted,
full-year earnings guidance by 3 cents to a range of $3.28 to $3.33
a share. It also increased its full-year sales forecast to a range
of $5.69 billion to $5.85 billion, which reflects a mix of
increased product sales and a boost from favorable currency rates,
but also pressure on Japanese sales following the earthquake and
tsunami there.
For the second quarter, St. Jude forecasted earnings of 83 cents
to 85 cents on sales of $1.41 billion to $1.47 billion.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
--Nathan Becker contributed to this article.
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