Medical device maker St. Jude Medical, Inc. (STJ) reported Wednesday a decline in third-quarter profit, hurt by one-time charges mainly on employee termination. On an adjusted basis, quarterly earnings grew from last year, boosted by higher sales that came in line with market projections. Further, the St. Paul, Minnesota-based company issued fourth-quarter earnings forecast, and lowered fiscal 2009 projection, both below Wall Street view.
Third-quarter net earnings were $166.94 million or $0.48 per share, compared to $184.70 million or $0.53 per share in the same quarter last year.
The latest quarter results included pre-tax charges of $57 million, or $0.11 per share, comprised primarily of employee termination costs related to continuing efforts to improve sales and sales support productivity as well as to streamline manufacturing operations.
Excluding charges, adjusted net earnings for the quarter were $204 million or $0.59 per share, compared to $189.60 million or $0.54 per share in the year-ago quarter.
On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.
The maker of cardiovascular and implantable neurostimulation medical devices recently had lowered its adjusted earnings outlook for the quarter, and was expecting in a range of $0.57 to $0.58 per share, citing lower than expected sales.
Net sales for the quarter rose 7% to $1.16 billion, as expected, from $1.08 billion a year ago, and came in line with twenty seven Wall Street analysts' consensus estimate of $1.16 billion. Foreign currency translation comparisons decreased third quarter sales by approximately $29 million. The company recorded total international sales of $540 million, and total US sales of $620 million.
Commenting on the results, St. Jude Medical Chairman, President and Chief Executive Officer Daniel Starks said, "Despite some challenging dynamics experienced during the third quarter, St. Jude Medical's revenue grew approximately 10% and we delivered 15% growth in adjusted earnings per share on a constant currency basis. International revenue grew 15% in the quarter, constant currency, but U.S. revenue was lower than expected."
Segment-wise, Cardiac Rhythm Management, or CRM, sales, which include implantable cardioverter defibrillator, or ICD, and pacemaker products, were $690 million, up 2% from last year. On a currency neutral basis, total CRM sales grew 5%. ICD product sales rose 2% year-over-year to $389 million, while the growth was 5% after adjusting for the impact of foreign currency. Third-quarter pacemaker sales totaled $301 million, up 1% on a reported basis, and up 4% adjusting for the impact of foreign currency.
Atrial Fibrillation, or AF, product sales in the third quarter grew 16% to $156 million, and the growth was 19% on a currency neutral basis. Neuromodulation product sales were $84 million, up 31% on a reported basis, and up 34% after adjusting for the impact of foreign currency.
The company's total Cardiovascular sales, which primarily include vascular closure and heart valve products, increased 11% to $230 million, and the growth was 13% on a currency neutral basis. Sales of vascular closure products rose 2% to $91 million, and heart valve product sales improved 3% to $80 million. After adjusting for the impact of foreign currency, both Vascular closure product sales and heart valve product sales rose 6%.
In the preceding second quarter, St. Jude Medical posted net income of $219.4 million or $0.63 per share, higher than last year's $192.9 million or $0.58 per share, and net sales advanced 4% to $1.18 billion.
Among peers, Boston Scientific Corp. (BSX) Monday reported third-quarter net income of $200 million or $0.13 per share, compared to a net loss of $62 million or $0.04 per share last year, helped by higher sales mainly from the Cardiac Rhythm Management segment. The Natick, Massachusetts-based medical device maker's adjusted net income grew to $291 million or $0.19 per share from $236 million or $0.16 per share in the year-ago quarter. Third-quarter net sales increased 2% to $2.025 billion from $1.978 billion in the third quarter of 2008. Excluding the impact of foreign currency and sales from divested businesses, net sales rose by 3% over a year earlier.
Diversified healthcare giant Johnson & Johnson (JNJ) last week posted a 1.1% rise in profit for the third quarter to $3.35 billion, and per share earnings improved 2.6% to $1.20. Meanwhile, the New Brunswick, New Jersey-based company's sales fell 5.3% to $15.1 billion on weak sales of its prescription drugs Topamax and Risperdal, negatively impacted by generic competition.
Drug and medical device maker Abbott Laboratories (ABT) on October 14 reported a 37% surge in third-quarter net earnings of $1.48 billion, or $0.95 per share, aided by strong sales of its arthritis drug Humira and nutritional products. Net sales increased 3.5% to $7.76 billion, and excluding an unfavorable foreign exchange impact of 4.9%, net sales would have increased 8.4%. Abbott Park, Illinois-based Abbott has immensely benefited from the launch of Xience V and has been on an acquisition spree in order to diversify and bolster its product line-up.
For the October-ending second quarter, Wall Street analysts are projecting medical technology company Medtronic, Inc. (MDT) to post earnings of $0.75 per share, on sales of $3.75 billion, higher than prior year's earnings of $0.67 per share and sales of $3.57 billion. In its preceding first quarter, the company had posted a 38% decline in its first-quarter profit to $445 million or $0.40 per share, hurt by charges, while adjusted net earnings rose 9% to $883 million or $0.79 per share, on 6% growth in net sales to $3.93 billion.
For the nine months of fiscal 2009, St. Jude Medical's net earnings rose to $587.58 million or $1.69 per share from prior year's $554.18 million or $1.58 per share a year ago. Adjusted net earnings grew to $624.63 million or $1.79 per share from $572.29 million or $1.64 per share in the previous year. Nine-month net sales increased to $3.48 billion from last year's $3.23 billion.
Looking ahead to the fourth quarter, St. Jude Medical said it expects earnings to be in the range of $0.61 to $0.63 per share. Analysts expect the company to report earnings of $0.66 per share for the fourth-quarter, with estimates ranging between $0.62 and $0.70 per share.
Starks said, "We are lowering our expectations for our fourth quarter results to accommodate the issues we are experiencing from a limited portion of our customer base in the U.S., but we are confident that our long term growth program is on track."
"Related to our U.S. growth, we have identified approximately 50 U.S. hospitals who did not participate in normal quarter end purchases of cardiac rhythm management devices due to a variety of financial considerations..." Stark added.
Further, St. Jude Medical said it now expects fiscal 2009 net earnings per share in the range of $2.30 to $2.32, and adjusted net earnings per share in the range of $2.41 to $2.43.The company said that its full-year adjusted earnings guidance does not include the impact of the charges recorded in the third quarter of 2009. Previously, the company was projecting fiscal 2009 earnings of $2.48 to $2.54 per share. Analysts expect the company to report earnings of $2.44 per share for the full-year 2009, with estimates ranging between $2.40 and $2.55 per share.
STJ closed Tuesday's regular trading session at $33.16, down $1.12, on a volume of 16.2 million shares, against a 3-month average volume of 5 million shares. In the past 52 weeks, shares have been trading between $24.98 and $41.96.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.