St. Jude Medical (NYSE:STJ) reported flat sales for the 2nd quarter, but still managed to beat out Wall Street’s earnings forecast and raised the bottom end of its earnings forecast for the full year.
The St. Paul, Minn.-based medical device company posted profits of $115 million, or 40¢ per share, on sales of $1.40 billion during the 3 months ended June 29.
That’s a -0.5% decline in sales and a 52.9% decline in profits compared with the same period last year, but the profit numbers include after-tax charges of $160 million, or 56¢ per share, as St. Jude Medical continued its restructuring plan and retired some of its long-term debt, according to a press release.
Excluding the 1-time charges, adjusted earnings per share were 96¢, 2¢ ahead of expectations on The Street.
"During the 2nd quarter, St. Jude Medical made good progress towards accelerating our sales growth on a sustainable basis. Our operating discipline, healthy balance sheet and strong cash flow will continue to allow us to fund disciplined acquisitions and return value to shareholders. We remain confident in our ability to deliver double-digit constant currency growth in 2013 adjusted earnings per share," chairman, president & CEO Daniel Starks said in prepared remarks.
St. Jude Medical said it expects to post EPS of 88¢-90¢ during the 3rd quarter and raised the lower end of its earnings guidance by 2¢, to $3.70-$3.73 from $3.68-$3.73.
Investors reacted positively to the news, sending STJ shares up 2.1% to $49.47 apiece in pre-market trading.
Sales for its cardiac rhythm management division were $718 million during the quarter, down 4% compared with Q2 2012, with implantable cardiac defibrillator sales slipping 1% to $454 million and pacemaker sales down 8% to $264 million.
That could be a sign that the ailing CRM market is recovering, Leerink Swann analyst Danielle Antalffy wrote in a note to investors this morning.
"Encouragingly, STJ beat on almost all major product lines, including a meaningful beat on ICDs that could imply: (1) market share gains supported by the ongoing Quadra rollout and positive data from HRS that may have largely mitigated Durata lead concerns; and/or (2) a potentially stabilizing — and maybe even recovering — ICD market, particularly in the U.S.," Antalffy wrote.