Medical devices giant
St. Jude Medical
(
STJ
) has unveiled preliminary sales data for fourth-quarter fiscal
2011. The Minnesota-based company expects to post revenues of $1.4
billion for the quarter, up 4% (3% in constant currency) year over
year, in line with the Zacks Consensus Estimate.
St. Jude noted that two of its four divisions posted
better-than-expected results in the quarter, despite the weakened
MedTech fundamentals. The company's shares rose $1.09 (or 3.15%) to
close at $35.70 on Monday.
Per the preliminary data, revenues from the Cardiac Rhythm
Management ("CRM") division, St. Jude's mainstay, fell 4% year over
year to $728 million, indicating sustained weakness in the CRM
space. ICD revenues clipped 5% to $436 million and pacemaker sales
declined 4% to $292 million. A still choppy U.S.defibrillator
market remains an overhang on St. Jude and its peers
Medtronic
(
MDT
) and
Boston Scientific
(
BSX
).
On a positive note, Atrial Fibrillation revenues climbed 13%
year over year to $218 million. Neuromodulation sales jumped 12% to
$121 million. The cardiovascular franchise continues its healthy
growth streak with revenues surging 18% to $340 million. Within
Cardiovascular, vascular products sales crept up 8% to $190
million. Structural heart product revenues soared 35% to $150
million. Healthy growth across these three divisions helped offset
the weakness in the core CRM segment.
St. Jude appears optimistic on the earnings front as it expects
adjusted (excluding charges) earnings for the fourth quarter to be
within its guidance range of 83 cents to 85 cents, issued in
October 2011. The current Zacks Consensus Estimate for the quarter
is 84 cents. The company expects to report final results before the
opening bell on January 25.
On the new product front, the company achieved a massive
milestone in the quarter as it won the green signal of the U.S.
Food and Drug Administration ("FDA") for its much-awaited Unify
Quadra cardiac resynchronization therapy defibrillator ("CRT-D"),
the industry's first quadripolar pacing system. The device is
expected to help St. Jude gain ground in the highly competitive
U.S. defibrillator market.
We remain impressed by St. Jude's solid fundamentals, healthy
growth trajectory, strong product mix, robust pipeline and cost
management initiatives. A spate of new growth drivers (including
new products and emerging markets) are expected to offer
opportunities for accelerated sales growth over the next few years.
However, we remain wary about competition-driven pricing pressure
in a soft CRM market. Our Neutral recommendation on the stock is
supported by a short-term Zacks #3 Rank (Hold).
BOSTON SCIENTIF (
BSX
): Free Stock Analysis Report
MEDTRONIC (
MDT
): Free Stock Analysis Report
ST JUDE MEDICAL (
STJ
): Free Stock Analysis Report
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