Wednesday, St. Jude Medical Inc. (STJ), maker of cardiovascular and implantable neurostimulation medical devices, posted higher profits and sales for the second quarter and reconfirmed its earnings forecast for the full year. Also, the company issued third-quarter earnings outlook, and said it would buy back up to $500 million of St. Jude Medical common stock.
Q2 Review
The St. Paul, Minnesota-based company's second-quarter net income was $219.4 million or $0.63 per share, compared to $192.9 million or $0.58 per share in the prior year quarter.
On average, 29 analysts polled by Thomson Reuters expected the company to post earnings of $0.63 per share. Analysts' estimates typically exclude special items.
Quarterly net sales advanced 4% to $1.18 billion from the previous year's $1.14 billion, while twenty-six Wall Street analysts had a consensus revenue estimate of $1.20 billion for the quarter.
Revenue for the latest quarter increased 10% after adjusting for the impact of foreign currency. Foreign currency translation comparisons decreased second-quarter sales by about $69 million.
St. Jude Medical Chairman, President and Chief Executive Officer Daniel Starks, said, "Sales results met or exceeded guidance in each of our four major growth programs during the second quarter. We are pleased with our currency neutral sales growth of 14 percent for the first half of 2009."
Line Of Businesses
The company's total Cardiac Rhythm Management or CRM sales, which include implantable cardioverter defibrillator and pacemaker products, edged down 1% to $704 million. On a currency neutral basis, total CRM sales grew 5% over last year.
Second-quarter product sales of Atrial Fibrillation or AF totaled $156 million, an increase of 16% over the previous year. On a currency neutral basis, total AF sales rose 23% over 2008.
St. Jude Medical sales of neuromodulation products were $81 million, up 33% from last year, and Neuromodulation sales were up 36% after adjusting for the impact of foreign currency in second quarter of 2009.
Total cardiovascular sales, which primarily include vascular closure and heart valve products, improved 7% to $243 million. On a currency neutral basis, total cardiovascular sales grew 13% over the comparable quarter in 2008. This product category now includes sales of products that St. Jude Medical acquired from Radi Medical Systems AB in December 2008.
Year-To-Date Highlights
For the six-month period, the company reported net income of $420.6 million or $1.20 per share, compared to $369.5 million or $1.06 per share in the year-ago period.
Net sales for the six months ended June 28, 2009 were $2.32 billion, up from $2.15 billion in the comparable period of the previous year.
Share Repurchase Program
In addition, the company announced that its Board has authorized the repurchase of up to $500 million of St. Jude Medical common stock. The company intends to repurchase the shares in the second half of 2009 through the open market, in privately negotiated transactions, or otherwise.
Road Ahead
Looking forward to the third quarter, the company projects earnings to range between $0.61 and $0.63 per share. Further, the company reaffirmed its fiscal 2009 earnings forecast of $2.48 - $2.54 per share.
Analysts are looking for earnings of $0.63 per share for the third quarter, and $2.52 per share for the full year.
Peer Performance
Among St. Jude Medical's rivals, Boston Scientific Corp. (BSX) reported higher profit for the second quarter that totaled $158 million or $0.10 per share, compared to $98 million or $0.07 per share in the prior-year quarter, boosted by higher sales, absence of divestiture-related losses and acquisition-related charges, which lowered year-ago results. Quarterly net sales rose to $2.074 billion from $2.024 billion last year, which included sales from divested businesses of $19 million. Excluding the impact of foreign currency and sales from divested businesses, net sales grew by 7% over the year-ago period.
For the third quarter of 2009, Boston Scientific anticipates GAAP earnings of $0.08 - $0.13 per share and adjusted earnings of $0.17 - $0.21 per share. Net sales are estimated to range between $2.0 billion and $2.1 billion. The Street currently expects earnings of $0.15 per share, on revenues of $2.03 billion for the third quarter.
Another peer, Edwards Lifesciences Corp. (EW) said its second-quarter profit rose to $47.5 million or $0.81 per share from $39.7 million or $0.67 per share in the same quarter of last year. Net sales for the quarter increased 2.4% to $335.5 million from $327.6 million in the prior-year quarter.
For the third quarter, Edwards projects earnings, excluding special items, in a range of $0.66 - $0.70 per share, while Street analysts expect $0.70 per share for the quarter.
Stock Quotes
St. Jude Medical shares, which have been trading between $24.98 and $48.24 in the past 52 weeks, closed Tuesday's trading session at $39.60, up 57 cents or 1.46%.
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