St. Jude Tops Forecasts

Pacemaker sales have exceeded the company's expectations for two quarters in a row, Starks said during a conference call. "We think that we're taking share in a market that's picking up," he said.

Sales in St. Jude's atrial-fibrillation business rose 29% to $81 million, while cardiology products sales rose 4% to $109 million. Cardiac surgery sales totaled $68 million, up 10%, with heart-valve sales rising 10% to $64 million.

Sales of neuromodulation devices were $44 million, up 13% from Advanced Neuromodulation Systems' stand-alone sales in the year-ago quarter. St. Jude, which didn't have neuromodulation sales during the third quarter of 2005, acquired Advanced Neuromodulation late last year.

"Our third-quarter results reinforce our optimism that we are well positioned to return to stronger growth in 2007 and beyond," Starks said. "We believe that we continued to gain market share in ICDs, pacemakers and atrial-fibrillation products, all of which are key to our long-term success."

The company's guidance, however, was slightly short of estimates. The company expects fourth-quarter earnings of 38 cents to 40 cents a share. Analysts, on average, project earnings of 41 cents a share.

ICD revenue for the fourth quarter should be $265 million to $295 million, St. Jude said. Additionally, the company forecast atrial-fibrillation product revenue of $80 million to $85 million, cardiology sales of $105 million to $115 million, cardiac surgery sales of $65 million to $70 million and neuromodulation revenue of $42 million to $47 million.

St. Jude acknowledged that there's little visibility for the fourth quarter, and it "would not stun us" if the company was wrong about its ICD market expectations, Starks said.