St Jude Medical profit falls on one-time charges

St Jude profit falls 10 pct on charges, but heart device sales improve, trims outlook

• On 11:35 am EDT, Wednesday October 21, 2009

ST. PAUL, Minn. (AP) -- St. Jude Medical Inc. said Wednesday its profit fell 10 percent in the third quarter, as employee termination expenses and other charges more than offset improved heart device sales.

The medical products company trimmed its annual profit guidance, and gave a fourth quarter forecast that was below analyst expectations.

It said it was lowering its expectations because about 50 U.S. hospitals failed to participate in normal quarter end purchases of cardiac rhythm management devices due to a variety of financial considerations.

The company said it was "confident that our long term growth program is on track."

Its shares rose 72 cents, or 2.2 percent, to $33.88 in late morning trading.

For the quarter ended Oct. 3, St. Jude's profit fell to $166.9 million, or 48 cents per share. That included employee termination costs of $31.9 million, or 9 cents per share, and impairment charges of $5.2 million, or 2 cents per share. A year ago St. Jude reported net income of $189.7 million, or 53 cents per share.

Excluding the one-time costs, the company said it earned $204 million, or 59 cents per share. According to Thomson Reuters, analysts expected 59 cents per share. Analyst estimates usually exclude one-time items.

St. Jude said revenue grew 7 percent, to $1.16 billion from $1.08 billion, as sales of all its products increased. The latest total matched Wall Street estimates.

Sales of heart rhythm management devices rose 2 percent to $690 million. Sales of implantable cardioverter defibrillators, which are used to treat rapid heartbeats, rose 2 percent to $389 million, and revenue from sales of pacemakers, which treat slow heartbeats, rose 1 percent to $301 million.

Sales of devices that treat atrial fibrillation rose 16 percent to $156 million. In atrial fibrillation, the upper chambers of the heart beat rapidly and ineffectively, which can cause high blood pressure and stroke.

St. Jude said cardiovascular product sales grew 11 percent to $230 million. Revenue from neuromodulation implants, which stimulate the nervous system to treat pain and other conditions, rose 31 percent to $84 million.

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