St. Jude Medical‘s (NYSE:STJ) stock took a hit today after the medical device company said it might get a warning from the FDA over one of its California factories and lowered its outlook for the rest of the year.
The beleaguered St. Paul-based firm has had a rough go of it lately, waging a spat with a key supplier and weathering high-profile exposure for its handling of the recall of its Riata defibrillator leads. This morning St. Jude CEO Daniel Starks told analysts on a conference call that the federal watchdog agency might slap the company with a Form 483 warning letter over a cardiac rhythm management plant in Sylmar, Calif.
"It’s a risk, and don’t be shocked if that risk is realized," Starks said, according to Reuters.
St. Jude also cut its outlook for the 2nd consecutive quarter, saying it now expects adjusted earnings per share of $3.42 to $3.44, down from $3.40-$3.45 previously.
STJ shares were trading at 40.24 as of about 11:30 today, down 6.3%.
The company reported profits of $176.0 million, or 56¢, for the 3 months ended Sept. 29 on sales of $1.33 billion, representing a 22.5% bottom-line decline and a 4.1% sales decline.
Excluding 1-time items, St. Jude posted adjusted EPS of 83¢, 2 pennies over expectations on Wall Street.
It bread-and-butter cardiac rhythm management business suffered an 8% decline compared with the same period last year, dropping to $691 million and down 4% on a constant currency basis.
"Our existing growth drivers continued to perform well this quarter and we made good progress with our emerging growth drivers that will launch in the coming year. As we move into 2013 we are focused on execution and on ensuring our organization is as efficient and streamlined as possible to achieve our goal of delivering innovative medical devices that improve patient outcomes and reduce the cost of health care," Starks said in prepared remarks.
St. Jude also said its board OK’d a $300 million share buyback.
"The authorization of this share repurchase program allows us to use our strong balance sheet and cash flow to offset dilution from our stock compensation programs in 2013 and maximizes our flexibility to achieve our business objectives," Starks said.