Updated from 9:30 a.m. St. Jude Medical's ( STJ) shares rose early Thursday after the medical device maker reported solid fourth-quarter earnings and issued guidance for growth in 2007. Shares gained 94 cents, or 2.4%, to $40.61. Fourth quarter earnings reached $155 million, or 42 cents a share, including a retroactive benefit of approximately 3 cents a share related to a research and development tax credit for the first nine months of 2006. This compares to earnings of $5 million, or a penny a share in the year-ago period. Analysts were expecting the company to earn 39 cents a share. Sales were $864 million, up more than 9% from the fourth quarter of 2005 and exceeding analysts' estimates of $852.35 million. St. Jude's cardiac rhythm management segment brought in $535 million in the quarter, up 4% from a year ago. Atrial fibrillation device sales were $91 million, up more than 26%. "Our fourth quarter results reflect the significant progress we are making within all of our growth platforms," said CEO Daniel Starks in a press release. "Momentum is strong in our new growth platforms, particularly in atrial fibrillation and neuromodulation, and the improvement we are seeing in the overall ICD market supports our optimism in a recovery for that market in 2007." Sales of implantable cardioverter defibrillators were $289 million, up 3% from a year ago. St. Jude expects first quarter 2007 defibrillator sales of between $275 million to $305 million, with a 3% to 9% increase sales of the devices for the full year. "Negative trends in the overall ICD market are now behind us," said CEO Starks in the company's earnings conference call Thursday. Trends in the second half of 2006 were positive and "the stars are nicely aligned" for growth. Pacemaker sales were $118 million, up 5% in the fourth quarter. First quarter pacemaker sales are expected to see a significant upswing and reach between $235 million and $250 million. Neuromodulation device sales were up 16% to $50 million in the fourth quarter. St. Jude expects sales of those devices to reach $47 million to $52 million in the first quarter of 2007. For the first quarter of 2007 overall, the company expects to earn 39 cents to 41 cents a share. For the full year, St. Jude Medical sees earnings of between $1.70 and $1.75 a share. Additionally, in the first half of the year, St. Jude expects to buy back $1 billion in its common stock. Over the course of the year, the device maker expects to launch approximately 20 new defibrillator and pacemaker products. St. Jude says details on those products will be provided at an investor conference slated for Feb. 9.