St. Jude Medical, Inc. (NYSE: STJ) today reported sales and net earnings for the third quarter ended October 1, 2011.
Third Quarter Sales
The Company reported net sales of $1.383 billion in the third quarter of 2011, an increase of 12 percent compared with the $1.240 billion in the third quarter of 2010. Revenue for the third quarter increased 6 percent after adjusting for the impact of foreign currency. Foreign currency translation comparisons increased third quarter sales by approximately $73 million.
Commenting on the Company's results, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, "We made good progress during the third quarter implementing numerous new growth drivers. We are supporting these new growth drivers with robust comparative effectiveness data. We simultaneously are reducing costs and increasing productivity. St. Jude Medical's program for delivering superior growth over the long-term is on track."
Cardiac Rhythm Management (CRM)
Total CRM sales, which include ICD and pacemaker products, were $751 million for the third quarter of 2011, a 2 percent increase compared with the third quarter of 2010.
Of that total, ICD product sales were $445 million in the third quarter, a 1 percent increase compared with the third quarter of 2010.
Third quarter pacemaker sales were $306 million, up 2 percent from the comparable quarter in 2010.
Atrial Fibrillation (AF)
AF product sales for the third quarter of 2011 totaled $202 million, a 20 percent increase over the third quarter of 2010.
Neuromodulation product sales were $102 million in the third quarter of 2011, up 10 percent from the comparable quarter of 2010.
Total cardiovascular sales, which primarily include vascular and structural heart products, were $328 million for the third quarter of 2011, a 37 percent increase over the third quarter of 2010 on a reported basis. This division now includes sales from AGA Medical, Inc., which St. Jude Medical acquired in November 2010.
Sales of vascular products in the third quarter of 2011 were $177 million, up 10 percent from the comparable quarter in 2010.
Structural heart product sales for the third quarter of 2011 were $151 million, a 91 percent increase over the third quarter of 2010, with the addition of AGA Medical products to the business.
Third Quarter Earnings Results
In the third quarter, the Company recorded after-tax charges of $21 million, or $0.06 per diluted share, related primarily to ongoing restructuring actions that began in the second quarter to realign certain activities in our CRM business as well as employee termination and other costs primarily associated with continuing efforts to improve our international sales and sales support organization. Also during the third quarter, the Company recorded after-tax charges of $9 million, or $0.03 per share, related to increased collection risk for accounts receivable related to one customer in Europe.
Including these items, reported net earnings for the third quarter of 2011 were $226 million, or $0.69 per share. This compares to reported net earnings for the third quarter of 2010 of $208 million or $0.63 per share. Excluding these items, adjusted net earnings for the third quarter of 2011 were $256 million, or $0.78 per diluted 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.
Fourth 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 fourth quarter and full-year by product category and update its expectations related to full-year earnings per share.
The Company expects its consolidated adjusted net earnings for the fourth quarter of 2011 to be in the range of $0.83 to $0.85 per diluted share and for full-year 2011 consolidated adjusted net earnings to now be in the range of $3.26 to $3.28 per diluted share. A reconciliation of the Company's quarterly and annual guidance is provided in the schedule below.