ST. PAUL, Minn. (AP) — St. Jude Medical posted a 21 percent decline in net income during the fourth quarter as it restructured its heart rhythm device business, but topped Wall Street expectations with those one-time costs removed.
Shares of the medical device maker rose nearly 5 percent in afternoon trading after a conference call in which CEO Daniel Starks said that demand for its new defibrillator technology was very strong. Federal regulators approved the technology less than two months ago.
Net income was $163.4 million, or 51 cents per share, from a year-ago total of $206.4 million, or 62 cents per share. St. Jude said the costs of restructuring its cardiac rhythm management unit were $102 million, or 32 cents per share. It earned 86 cents per share if those costs and other one-time items are excluded.
Revenue rose 4 percent, to $1.41 billion from $1.35 billion.
Analysts expected St. Jude to report a profit of 84 cents per share and $1.4 billion in revenue, according to estimates compiled by FactSet.
Starks said that St. Jude expects to pick up at least one point of global market share due to the launch of its Quadripolar defibrillator technology, which provides doctors with more options when treating patients.
"One leading indicator we are tracking to measure the progress of our Quadripolar (implantable cardioverter defibrillator) launch is the number of new contracts we have signed with customers in the United States in the last eight weeks since we received FDA approval for the product," Starks said. "In that time, we have signed over 150 new ICD contracts with customers. Each contract reflects an expected gain in ICD market share in 2012 in the hospital or health care system covered by the contract."
The company said sales of cardiac rhythm management devices fell 4 percent to $728 million. Sales of implantable defibrillators slipped 5 percent to $436 million and pacemaker sales declined 4 percent to $292 million. Implantable defibrillators treat rapid heartbeats and pacemakers treat slow heartbeats.
St. Jude began restructuring the business during the second quarter.
The company said sales of atrial fibrillation devices rose 13 percent to $218 million. Sales of cardiovascular devices climbed 18 percent to $340 million, as vascular product sales rose 8 percent to $190 million and structural heart product sales jumped 35 percent to $150 million. St. Jude expanded its structural heart device business in late 2010 when it bought AGA Medical. Sales of neuromodulation products, which use electrical stimulation to treat pain, grew 12 percent to $121 million.
For all of 2011, St. Jude said net income fell 5 percent to $864.2 million, or $2.64 per share, from $907.4 million, or $2.75 per share. Revenue grew 9 percent, to $5.61 billion from $5.16 billion.
The company said it expects to earn $3.43 to $3.48 per share in 2012 if one-time items are excluded. That includes a profit of 82 to 84 cents per share in the first quarter.
On average, analysts estimate that St. Jude Medical Inc. will report a profit of $3.52 per share for the year and 85 cents per share for the first quarter.
Shares of St. Jude rose $1.74 to $40.30 in afternoon trading.
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