St. Jude Medical Q3 Profit Beats View, But Lowers 2014 Revenue Outlook

(RTTNews) - Medical equipment maker St. Jude Medical Inc. (STJ) on Wednesday reported a 9 percent decline in profit for the third quarter from last year, as higher revenues were more than offset by one-time charges. However, adjusted earnings per share for the quarter beat analysts' expectations by a penny, while revenues missed their estimates.

Looking ahead, the company forecast financial results for the fourth quarter below Street expectations and also lowered its fiscal 2014 revenue outlook, citing slower than expected sales in international markets.

Net earnings attributable to the company for the third quarter declined to $238 million or $0.82 per share from $262 million or $0.90 per share in the year-ago period.

During the latest quarter, the company recognized charges of $39 million or $0.14 per share, primarily related to product field actions, impairment charges and restructuring activities.

Adjusted earnings per share for the latest quarter were $0.97, compared to $0.90 per share in the same period last year. On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.96 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 3 percent to $1.37 billion from $1.34 billion in the prior year. Analysts were looking for consensus revenue for the quarter of $1.38 billion.

On a constant currency basis, net sales increased 2 percent. Foreign currency translation were not significant to overall sales in the quarter.

Total international sales for the quarter grew 2 percent from last year to $706 million, while U.S. sales increased 3 percent to $666 million.

Daniel Starks, chief executive officer of St. Jude Medical said, "During the third quarter, sales growth accelerated in the U.S. due to the strength of our innovation and new products such as our CardioMEMS heart failure monitoring system. However, sales growth in our international markets was slower than expected and we have adjusted our outlook for the fourth quarter accordingly."

The Cardiac Rhythm Management or CRM sales, which include implantable cardioverter defibrillator and pacemaker products, rose 1 percent from last year to $688 million.

In Atrial Fibrillation or AF, sales grew 8 percent from last year to $253 million.

Total cardiovascular sales rose 2 percent from the year-ago period to $324 million. The business primarily includes vascular and structural heart products.

Neuromodulation product sales increased 3 percent from last year to $107 million.

Looking ahead to the fourth quarter, St. Jude forecast consolidated net earnings of $0.93 to $0.95 per share, adjusted net earnings of $1.02 to $1.04 per share, and revenue in a range of $1.385 billion to $1.465 billion.

Analysts expect the company to earn $1.04 per share for the quarter on revenues of $1.49 billion.

For fiscal 2014, St. Jude now forecasts consolidated net earnings of $3.55 to $3.57 per share, adjusted net earnings of $3.97 to $3.99 per share, and total revenue of $5.568 billion to $5.648 billion.

Earlier, the company projected full-year consolidated net earnings of $3.57 to $3.62 per share, adjusted net earnings of $3.96 to $4.01 per share, and total revenue in a range of $5.640 billion to $5.760 billion.

Wall Street expects earnings of $3.98 per share for the year on revenues of $5.69 billion.

STJ closed Tuesday's trading at $59.91, down $0.71 or 1.17 percent on a volume of 2.92 million shares.