St. Jude Meets Lowered Estimates

The company expects to earn $1.55 to $1.60 this year.
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St. Jude Medical

(STJ)

reported sales and earnings Wednesday that were in line with the disappointing estimates it offered earlier this month.

Just after the quarter ended, St. Jude said its first-quarter results would miss Wall Street's projections because of weaker-than-expected sales of its implanted defibrillators. In recent months, the number of procedures being performed has dropped for all makers of the devices.

St. Jude's sales were $784 million in the first quarter, up 18% from the year-earlier period and matching its preannounced results. In addition to the disappointing defibrillator sales, sales took a $22 million hit from unfavorable foreign currency translations.

Before its warning, analysts surveyed by Thomson First Call were looking for a top line of $827.5 million. After the announcement, analysts lowered their sales expectations to $790.8 million.

St. Jude earned $137 million, or 36 cents a share, in the first quarter, including costs of 3 cents a share for expensing stock options. The company had said it would earn 35 cents to 36 cents a share. Excluding the option costs, St. Jude would have had a profit of 39 cents.

Sales of its implanted defibrillators were $262 million, up 27% from a year ago. Pacemaker sales totaled $221 million, a 2% increase. St. Jude's sales of neuromodulation products reached $42 million in the first quarter, up 31% with help from the acquisition of Advanced Neuromodulation Systems.

Looking ahead, the company said second-quarter earnings should come in at 36 cents to 39 cents a share. For the full year, earnings are expected to be between $1.55 and $1.60 a share, including the impact of stock-compensation expensing.

St. Jude also announced a $700 million share repurchase program, which will replace the company's previous plan to buy back up to $300 million of its stock.

Shares of St. Jude closed at $36.40 Tuesday, up 30 cents.