St. Jude sales up, and even better 2012 is predicted

  • Article by: JAMES WALSH , Star Tribune
  • Updated: January 25, 2012 - 9:07 PM

Results beat estimates as orders for Quadra pacing system and other products make gains.

Even as it reported encouraging quarterly results Wednesday, St. Jude Medical Inc. was pointing to brighter things ahead.

Chief Financial Officer John Heinmiller said St. Jude expects a stronger 2012 and 2013, fueled by more than 150 early orders in the past eight weeks for the just-launched Quadra pacing system, as well as other new products.

With the Little Canada-based company expecting revenue growth this year of 4 to 7 percent -- numbers that several analysts called "conservative" -- St. Jude saw its stock climb 4.5 percent Wednesday on predictions for a solid year.

"In addition to growth, we expect to build momentum with more visibility and with how some new products are developing," Heinmiller said in an interview.

The company's fourth-quarter and year-end sales and earnings came in ahead of analysts' expectations. Shares closed at $40.30, up $1.74.

St. Jude's new Quadra is a cardiac resynchronization therapy defibrillator (CRT-D), a device that is implanted in the chest and usually connected to the heart with three wires, or leads. The device stimulates the heart's lower chambers so they are "synchronized" and pump blood to the body more efficiently. The devices also can defibrillate or shock the heart if necessary.

Quadra has four electrodes on the lead that is placed on the left ventricle. The company says that simplifies the implant procedure and minimizes post-surgery complications.

In addition to the Quadra system, St. Jude has several other products in the pipeline, including a new Fractional Flow Reserve system to measure blood flow blockages in the heart. A transcatheter atrial valve product is expected to get European approval in 2012, Heinmiller said.

"As the year progresses, we expect to build momentum," Heinmiller said.

Analysts were encouraged by St. Jude's outlook.

"[St. Jude's] management has reset the bar with numbers that assume conservative end-user markets and did a good job of highlighting new products that will drive the mid-and long-term," Tao Levy of Collins Stewart wrote in an e-mail.

Said Thomas Gunderson of Piper Jaffray: "The positive stock move today is in part due to a better-than-expected outlook and in part due to a belief that the conservative-based guidance will serve as a base for 2012 performance."

St. Jude reported net earnings for the fourth quarter that were down 21 percent at $163 million, or 51 cents per share. For the full year of 2011, reported net earnings were $864 million -- or $2.64 per share.

Excluding one-time items, earnings rose 9 percent to $274.3 million, or 86 cents a share. That beat the consensus analysts' forecast of 84 cents, as compiled by Bloomberg.

The numbers for 2011 showed net sales of $1.407 billion in the fourth quarter, an increase of 4 percent over the fourth quarter of 2010, and net sales for the year of $5.612 billion -- a 9 percent increase over 2010.

James Walsh • 612-673-7428

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