St. Jude Medical Inc.'s (STJ) second-quarter earnings fell 5.2%
on restructuring-related charges as the medical-device maker posted
sales growth and benefitted from currency fluctuations.
For the year, the company lowered its per-share earnings
forecast by three cents to $3.25 to $3.30. For current quarter, the
company projected per-share earnings of 74 cents to 76 cents, below
views of analysts polled by Thomson Reuters for 80 cents.
U.S. defibrillator sales have been under pressure recently from
lower procedure volumes and a negative study earlier this year. St.
Jude's defribillator sales were up 1% in the latest quarter amid a
tough comparison with a year earlier that was affected by sales it
picked up as Boston Scientific Corp. (BSX) temporarily stopped
selling defibrillators in the U.S. as it sorted out regulatory
paperwork issues. Without the impact, St. Jude said defibrillator
sales rose 5%.
St. Jude, which is spending more this year to boost its product
pipeline, has managed to outpace sluggish growth in a market for
implantable defibrillators--its biggest business--with help from
new products. It competes closely there with Medtronic Inc. (MDT)
and Boston Scientific.
St. Jude reported a profit of $240.9 million, or 72 a share,
down from $254 million, or 77 cents a share, a year earlier.
Excluding restructuring-related charges, earnings were up at 85
cents from 79 cents. Revenue jumped 10% to $1.45 billion, or 4%
excluding currency fluctuations.
St. Jude in April expected earnings of 83 cents to 85 cents on
sales of $1.41 billion to $1.47 billion.
Gross margin fell to 72.7% from 73.7% on restructuring-related
impacts, and edged down 0.2 percentage point to 73.5% excluding
them.
Sales at its heart-rhythm business, which includes pacemakers
and defibrillators, were up 1%, or 3% after adjusting for the prior
year benefit. Pacemaker sales were essentially flat.
Sales of atrial fibrillation products rose 18% and
cardiovascular sales, which primarily include vascular and
structural heart products were up 35%, aided by its AGA Medical
Holdings Inc. acquisition.
Shares closed Tuesday at $46.82 and were inactive premarket. The
stock is up 31% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com