Medical devices major,
St. Jude Medical Inc.
(
STJ
) released preliminary results for the 2012-fourth quarter. The
company will report its financial results on Jan 23, before
markets opens.
St. Jude expects adjusted earnings for the quarter in the range
of 90 cents-92 cents per share, surpassing its earlier guidance
of 86 cents-88 cents. This compared with the Zacks Consensus
Estimate of 89 cents for the quarter.
Adjusted earnings exclude one-time item charges of 50 cents-60
cents per share related to restructuring and other corporate
activities. Management stated that sales growth and cost
reduction measures will lead to the improvement in earnings.
Revenues
Total revenues for the quarter, on a constant currency basis, are
projected to be $1,372 million, down 1% year over year. The Zacks
Consensus Estimate for revenues is $1,370 million.
Segment Review
Based on the above projections, revenues from the core Cardiac
Rhythm Management (CRM) business declined 6% (5% on a constant
currency basis) to $682 million. Within CRM, Implantable cardiac
defibrillators (ICD) revenues were down 3% at $422 million. This
segment continues to be plagued by the Durata lead issues.
Pacemaker revenues declined 11% to roughly $260 million.
Neuromodulation revenues decreased 7%, (down 6% in constant
currency) year over year to $113 million. Revenues from St.
Jude's Cardiovascular segment inched down 1% (up 1% in constant
currency) to $338 million. Within Cardiovascular segment,
structural heart devices revenues increased 1% to $152 million
but the same from vascular offerings dipped 2% to $186 million.
However, on a positive note, Atrial Fibrillation (AF) revenues
climbed 10% (up 11% in constant currency) to $239 million in the
quarter.
About the company
St. Jude, with a market cap of $11.80 billion, is a leading
medical devices manufacturer maintaining a solid rate of growth
over the past decade. We are impressed by the company's efforts
in leveraging its margins by undertaking various restructuring
initiatives and controlling expenses.
However, St. Jude's ICD business is facing operational headwinds
concerning the Durata leads, which is affecting its top-line
growth. This might lead its competitors in the CRM space such as
Medtronic Inc.
(
MDT
) and
Boston Scientific Corporation
(
BSX
) gain market share.
St. Jude currently carries a Zacks Rank #3 (Hold), which
complements our Neutral recommendation on the stock for the long
term.
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