St. Jude Medical, Inc. (NYSE: STJ) today reported sales and net earnings for the first quarter ended April 2, 2011.
First Quarter Sales
The Company reported net sales of $1.376 billion in the first quarter of 2011, an increase of 9 percent compared with the $1.262 billion in the first quarter of 2010. Revenue for the first quarter increased 8 percent after adjusting for the impact of foreign currency. Foreign currency translation comparisons increased first quarter sales by approximately $17 million.
Commenting on the first quarter and the Company's growth program, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, "During the first quarter, we continued to make good progress in developing the new growth drivers we need to return to double-digit sales growth on a sustainable basis. Our gross margin has strengthened, we have continued to invest in research and development at an elevated rate, and our sales and earnings growth outlook have both improved. We are off to a good start making 2011 another very successful year for St. Jude Medical."
Cardiac Rhythm Management (CRM)
Total CRM sales, which include ICD and pacemaker products, were $762 million for the first quarter of 2011, a 1 percent increase compared with the first quarter of 2010. Total CRM sales for the first quarter grew 5 percent after adjusting for the one-time benefit of a competitor's suspension of sales of ICD products in the United States during the prior year.
Of that total, ICD product sales were $465 million in the first quarter, a 3 percent increase compared with the first quarter of 2010. Adjusting for the one-time benefit we experienced in the U.S. in the prior year, ICD revenue grew 9 percent this quarter.
First quarter pacemaker sales were $297 million, a decrease of 1 percent from the comparable quarter of 2010.
Atrial Fibrillation (AF)
AF product sales for the first quarter totaled $195 million, a 15 percent increase over the first quarter of 2010.
St. Jude Medical sales of neuromodulation products were $92 million in the first quarter of 2011, up 10 percent from the comparable quarter of 2010.
Total cardiovascular sales, which primarily include vascular and structural heart products, were $327 million for the first quarter of 2011, a 28 percent increase over the first quarter of 2010. This division now includes sales from AGA Medical, Inc., which St. Jude Medical acquired in November 2010.
Sales of vascular products during the first quarter of 2011 were $184 million, up 8 percent from the comparable quarter of 2010.
Structural heart product sales for the first quarter of 2011 were $143 million, a 66 percent increase over the first quarter of 2010, with the addition of AGA Medical products to the category.
First Quarter Earnings Results
In the first quarter of 2011 the Company recorded after-tax charges of $28 million, related primarily to acquisition and integration costs associated with AGA Medical, including an increase in cost of goods sold related to the step up in inventory values required under acquisition accounting.
Including these items, reported net earnings for the first quarter of 2011 was $233 million, or $0.71 per share. This compares to reported net earnings for the first quarter of 2010 of $239 million, or $0.73 per share. Excluding these items, adjusted net earnings for the first quarter of 2011 were $262 million, or $0.80 per share. A reconciliation of the Company's non-GAAP adjusted net earnings per share to the Company's GAAP net earnings per share is provided in the schedule at the end of the press release.
Second Quarter and Full Year 2011 Sales and Earnings Guidance
During a conference call today, St. Jude Medical will provide its range for revenue expectations for the second quarter and full year by product category.
The Company expects its consolidated adjusted net earnings for the second quarter of 2011 to be in the range of $0.83 to $0.85 per diluted share and is raising its full-year 2011 guidance to be in the range of $3.28 to $3.33. A further reconciliation of the Company's quarterly and annual guidance is provided in the schedule below.