Third-quarter sales for St. Jude Medical Inc. enjoyed a healthy 10 percent surge, but the St. Paul-based medical device giant’s Q3 net earnings dropped on a charge related to layoffs in its sales operation.
St. Jude posted net earnings of $166.9 million on sales of $1.16 billion during the three months ended Oct. 3, compared with $184.7 million in profits on sales of $1.08 billion during the 2008 third quarter.
The company chalked up the earnings slide to a $57 million charge related to “employee termination costs related to continuing efforts to improve sales and sales support productivity as well as to streamline manufacturing operations,” according to a press release. Excluding those charges, earnings rose 7.6 percent to $204 million.
Chairman, president and CEO Daniel Starks said the sales growth came despite “challenging dynamics,” adding that St. Jude identified about 50 hospitals in the U.S. that didn’t make their normal, quarter-end buys of defibrillators and pacemakers.
Sales of SJM’s cardiac rhythm management devices reached $690 million during the quarter, up 2 percent compared with Q3 2008, with implantable cardioverter defibrillator sales accounting for $389 million of the total (also up 2 percent) and pacemaker sales making up the $301 million balance (a 1 percent increase over the year-ago quarter).
St. Jude lowered its income guidance for the full year to $2.41-$2.43 per diluted share, down from its previous forecast of $2.48-$2.54.