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St. Jude Medical Reports Second Quarter 2010 Results

^{Published on 2010-07-22 05:41:58 - Market Wire}
 

ST. PAUL, Minn.--([ BUSINESS WIRE ])--St. Jude Medical, Inc. (NYSE: STJ), a global medical device company, today reported sales and net earnings for the second quarter ended July 3, 2010.

Second Quarter Sales

The Company reported net sales of $1.313 billion in the second quarter of 2010, an increase of 11 percent compared with the $1.184 billion in the second quarter of 2009. Foreign currency translation comparisons increased second quarter sales by approximately $5 million.

Commenting on the second quarter and the Companya™s growth program, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, aOur second quarter was highly successful by every major measure. Sales exceeded the high end of our guidance for the second quarter in a row. Adjusted earnings per share grew 25%. Operating margin improved by 210 basis points on a year over year basis at the same time we launched more than 10 new products, increased investment in R&D, and entered a new $500 million market through our acquisition of LightLab. Second quarter results and trends support raising our adjusted earnings per share guidance for the second quarter in a row.a

Cardiac Rhythm Management (CRM)

Total CRM sales, which include ICD and pacemaker products, were $788 million for the second quarter of 2010, a 12 percent increase compared with the second quarter of 2009. Based on estimates, the Company believes that approximately $15 million of U.S. ICD sales in the second quarter are attributable to a competitora™s suspension of sales of their ICD products in the U.S. for a period of time during the quarter.

ICD product sales were $471 million in the second quarter, an 18 percent increase compared with the second quarter of 2009.

Second quarter pacemaker sales were $317 million, an increase of 4 percent from the comparable quarter of 2009.

Atrial Fibrillation (AF)

AF product sales for the second quarter totaled $176 million, a 13 percent increase over the second quarter of 2009.

Neuromodulation

St. Jude Medical sales of neuromodulation products were $95 million in the second quarter of 2010, up 17 percent from the comparable quarter of 2009.

Cardiovascular

Total cardiovascular sales, which primarily include vascular closure and heart valve products, were $254 million for the second quarter of 2010, a 5 percent increase over the second quarter of 2009.

Sales of vascular closure products in the second quarter of 2010 were $98 million, approximately the same as the second quarter of 2009.

Heart valve product sales for the second quarter of 2010 were $87 million, a 4 percent increase over the second quarter of 2009.

Second Quarter Earnings Results

Reported net earnings for the second quarter of 2010 were $254 million, or $0.77 per diluted share. This compares to reported net earnings for the second quarter of 2009 of $219 million, or $0.63 per diluted share. In accordance with GAAP, reported net earnings for the second quarter of 2010 do not include any benefit from the federal research and development tax credit, which has yet to be extended for 2010. Including the benefit of this adjustment, which we continue to expect will be approved later this year, adjusted net earnings for the second quarter 2010 were $261 million, or $0.79 per diluted share. A further reconciliation of the Companya™s non-GAAP adjusted diluted earnings per share to the Companya™s GAAP diluted earnings per share is provided in the schedule below.

Second Quarter and Full Year 2010 Sales and Earnings Guidance

During a conference call today, St. Jude Medical will provide its range for revenue expectations for the third quarter and full year by product category.

The Company expects its consolidated earnings for the third quarter of 2010 to be in the range of $0.67 to $0.69 per diluted share and is raising its guidance for the full-year 2010 to be in the range of $2.86 to $2.91. The guidance for the third quarter reflects the normal seasonal impact of the summer selling period, updated currency assumptions and a return to normal competitive dynamics. The guidance also assumes that the federal research and development tax credit is approved and the benefit is recognized during 2010. A further reconciliation of the Companya™s quarterly and annual guidance is provided in the schedule below.

Non-GAAP Financial Measures

The Company provides adjusted net earnings and adjusted net earnings per share because St. Jude Medical management believes that in order to properly understand the Companya™s short-term and long-term financial trends, investors may wish to consider the impact of certain adjustments (such as in-process research and development charges, impairment charges, restructuring charges, litigation charges or litigation reserve adjustments and income tax adjustments). These adjustments result from facts and circumstances (such as business development activities, restructuring activities, asset impairment events or developments, settlements and other developments relating to litigation and resolution of audits by tax authorities) that vary in frequency and impact on the Companya™s results of operations. St. Jude Medical management uses adjusted net earnings and adjusted net earnings per share to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consolidated basis.

Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

Conference Call/Webcast

The second quarter 2010 St. Jude Medical earnings call can be heard live today beginning at 9 a.m. EDT (also archived for 90 days) on the Investor Relations section of our website [ sjm.com ].

About St. Jude Medical

St. Jude Medical develops medical technology and services that focus on putting more control into the hands of those who treat cardiac, neurological and chronic pain patients worldwide. The company is dedicated to advancing the practice of medicine by reducing risk wherever possible and contributing to successful outcomes for every patient. St. Jude Medical is headquartered in St. Paul, Minn. and has four major focus areas that include: cardiac rhythm management, atrial fibrillation, cardiovascular and neuromodulation. For more information, please visit [ sjm.com ].

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements include the expectations, plans and prospects for the Company, including potential clinical successes, anticipated regulatory approvals and future product launches, and projected revenues, margins, earnings and market shares. The statements made by the Company are based upon managementa™s current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include market conditions and other factors beyond the Companya™s control and the risk factors and other cautionary statements described in the Companya™s filings with the SEC, including those described in the Risk Factors and Cautionary Statements sections of the Companya™s Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2010.The Company does not intend to update these statements and undertakes no duty to any person to provide any such update under any circumstance.