St. Jude Medical (NYSE:STJ) is cutting its year-end earnings outlook amid continuing pressures on its bread-and-butter cardiac rhythm management business and poor foreign exchange rates.
The St. Paul, Minn.-based medical device maker cut its earnings per share estimate for 2012 by 4¢, to $3.40-$3.45, raising hackles on Wall Street. STJ shares were down more than 6% in early-morning trading today.
Analysts on The Street had pegged St. Jude’s EPS guidance at $3.46. Leerink Swann analyst Danielle Antalffy chalked most of that up to the expected foreign exchange effect.
Overall, St. Jude reported net earnings of $244 million on $1.4 billion in sales for the 3 months ended June 30, up 1.2% from $241 million on sales of $1.44 billion during Q2 2011. Earnings are down nearly 4% for the first 6 months of the year.
St. Jude’s bread-and-butter cardiac rhythm management business suffered during the quarter, with global sales sliding 6% to $746 million amid an industry-wide slowdown and continuing pressure from the Riata kurfluffle, which has led to slower adoption of the company’s next-generation Durata defibrillator leads. Domestic CRM sales dropped 4% to $384 million.
Global pacemaker sales were off by 9% to $287 million, compared to $315 million from the same period last year.
St. Jude reported positive growth for both its atrial fibrillation business, up 5% from last year, and its neuromodulation business, up 2%.
The company took a $27 million after-tax charge related to the shuttering of operations in Sweden, as well as "costs associated with continuing efforts to leverage sales and sales support organizations," the company said in a press release.
