At the end of 2011, the federal research and development tax credit expired, and it has not yet been extended for 2012. In this circumstance, GAAP requires us to estimate and record our effective income tax rate, assuming that the R&D credit is not extended. For purposes of this conference call and our calculation of adjusted net earnings, however, we are assuming that the tax credit will be extended for 2012 as in past years. As a result, comments referencing first quarter results and our guidance for 2012, including EPS amounts, are presented based on an effective income tax rate that contemplates the extension of the tax credit retroactive to January 1, 2012. To the extent the federal research development tax credit is not renewed, our effective income tax rate for 2012 would be higher than what is being presented during this call.
Earnings per share were $0.86 for the first quarter of 2012, an 8% increase over adjusted earnings per share of $0.80 in the first quarter of 2011 and above our guidance range of $0.82 to $0.84.
Before we discuss our first quarter 2012 sales results by product category with guidance for the second quarter and the remainder of 2012, let me comment on foreign currency. As discussed on prior calls, the 2 main currencies influencing St. Jude Medical's operations are the euro and the yen.
In preparing our sales and earnings guidance for the first quarter and the full year 2012, we used exchange rates which assumed that each euro would translate into about $1.26 to $1.31, and for the yen, each JPY 76 to JPY 81 would translate into USD $1. For the first quarter, the actual average exchange rates for the euro and the yen were consistent with these assumptions.In preparing our sales and earnings guidance for the second quarter and remainder of 2012, we are now assuming that each euro will translate into about $1.28 to $1.33, and we now expect each JPY 80 to JPY 85 to translate into USD $1. These changes in assumptions regarding currency exchange rates do not materially change our total forecasted sales for the remainder of 2012. Read the rest of this transcript for free on seekingalpha.com