Shares of St. Jude Medical (NYSE:STJ) jumped nearly 5% in early trading on Wall Street as the St. Paul, Minn.-based cardiac device maker said it was likely to meet its previously stated earnings guidance for the fourth quarter of 2011.
In preliminary earnings results for the 3-month period ended on December 31, 2011, the company reported sales of $1.047 billion, a 4% jump from the same period last year.
Robust sales in the med-tech maker’s vascular and structural heart, atrial fibrillation and neuromodulation businesses paved the way. However, STJ’s bread and butter cardiac rhythym management business contracted by 4% to $728 million.
In addition, STJ officials said they were "comfortable" with previously stated fourth quarter adjusted consolidated earnings per share guidance of $0.83 to $0.85 per share, excluding net charges totaling $0.30 to $0.35 per share, " related to ongoing restructuring actions and certain other corporate charges," according to a prepared release.
Traders on Wall Street reacted positively to the news, boosting shares of STJ more than 4% to $36.07 in mid-morning trading.
Leerink Swann analyst Rick Wise called the share price jump a “sigh of relief on overall better-than-feared results,” in a note to investors.
The news is welcome for St. Jude after the medical device giant was downgraded to "Hold" from "Buy" by Jeffries analyst Raj Denhoy last month.
The downgrade was largely due to an announcement by the St. Paul, Minn.-based company that its Riata defibrillator leads, which came off the market in 2009, had a higher failure rate than previously estimated.