St. Jude Q4 profit, medical device sales decline

St. Jude Medical's Q4 profit drops, due to higher taxes, lower sales of most medical devices

Associated Press

ST. PAUL, Minn. (AP) -- Troubled medical device maker St. Jude Medical Inc. posted a 4 percent drop in fourth-quarter profit as higher taxes and a drop in sales for most of its products offset tight spending. The company still managed to top Wall Street profit expectations.

The maker of pacemakers, heart-shocking defibrillators and other medical devices has been plagued over the past few years by recalls of wires for several heart devices, and analysts worry another recall could be coming.

The company, based in St. Paul, Minn., said Wednesday that net income was $120 million, or 39 cents per share for the three month-period that ended on Dec. 29, down from $125 million, also 39 cents per share, a year earlier.

Excluding one-time charges totaling 53 cents per share, net income would have been $285 million, or 92 cents per share. The charges include ongoing restructuring charges, litigation costs, an income tax loss related to the settlement of an audit and write-offs for discontinued products.

Analysts surveyed by FactSet were expecting earnings per share of 89 cents, excluding charges.

Revenue totaled $1.37 billion, matching analysts' consensus forecast. Sales were down 2.5 percent, from $1.41 billion in 2011's fourth quarter.

Net income fell despite an 18 percent drop in spending on marketing and administrative expenses, to $451 million.

Sales fell 3 percent to $422 million for the company's best-selling products, heart defibrillators implanted in patients to correct dangerous irregular heartbeats and prevent heart attacks. Pacemaker sales dropped 11 percent, to $260 million.

In the one bright spot in the quarter, sales of products to diagnose and treat the dangerous irregular heartbeat atrial fibrillation increased 10 percent to $239 million.

The company said it expects earnings per share of 91 cents to 93 cents in the first quarter and $3.68 to $3.73 for all of 2013. Those numbers exclude expected restructuring charges.

Last week, analysts said they think the Food and Drug Administration may call for a recall of another heart wire product called Durata. Earlier this month the company said it had received a warning letter from the FDA after agency inspectors found inconsistencies in how the company manufactured and documented defibrillators. The FDA will not allow any new products to be made at the plant making the defibrillators until problems with manufacturing and quality control are fixed.

St. Jude shares lost 5 cents to $39.62 on Wednesday.

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