Charges Hit St. Jude's Profit

Fourth-quarter sales, though, climb 29%.
Author:
Publish date:

Cardiac-device maker

St. Jude Medical

(STJ)

said fourth-quarter revenue advanced 29% as sales of defibrillators and atrial fibrillation products surged, but earnings sank after the company recorded a big charge.

For the quarter ended Dec. 31, sales totaled $789.9 million, up from $610.7 million last year. St. Jude earned $5 million, or 1 cent a share, compared with $125 million and 33 cents a share in the prior-year period.

The most recent fourth quarter includes a charge of $107 million, or 28 cents a share, associated with the acquisition of Advanced Neuromodulation Systems and a charge of $46 million, or 12 cents a share, for the purchase of Savacor.

Before the items, St. Jude would have earned 41 cents a share. On that basis, the company met the consensus forecast of analysts surveyed by Thomson First Call. Analysts were also looking for sales of $766.1 million in the quarter.

Fourth-quarter implantable cardioverter defibrillator sales totaled $280 million, a 62% increase from last year. Pacemaker sales edged up 4% to $233 million, and atrial fibrillation product sales rose 64% to $72 million.

St. Jude projected first-quarter earnings of 41 cents to 43 cents a share, excluding estimated stock compensation expenses of 3 cents to 4 cents. For 2006, the company expects a profit of $1.77 to $1.80 a share before 13 cents to 14 cents of stock compensation costs.

Analysts are calling for 41 cents in the first quarter and $1.77 for the year.

Reuters

reported that St. Jude is targeting sales growth of 18% to 22% for this year. That would imply sales of about $3.45 billion to $3.56 billion on the basis of 2005's revenue of $2.92 billion. Wall Street is expecting sales of $3.44 billion.

Shares of St. Jude were weaker after the quarterly report, recently losing $2.99, or 5.6%, to $50.31 on volume that was twice the daily average.