St. Jude Medical Inc. reported an 8 percent jump in its adjusted profit for the third quarter, but the company lowered its revenue guidance for the fourth quarter.
The medical device maker said Wednesday it saw sales gains across the board during the July-to-September period. Its biggest business, in implantable defibrillators and pacemakers, experienced a 1 percent jump.
But slower-than-expected growth in international sales of just 2 percent contributed to an adjustment in outlook for the rest of the year. Sales at the Little Canada-based company are about evenly split between the U.S. and international markets.
"It's a tale of two quarters," said Don Zurbay, the chief financial officer at St. Jude Medical, in an interview. "Our growth rate in the U.S. has been improving. … The disappointing part of the quarter was related to our international sales."
Challenges overseas include general weakness in international markets, Zurbay said, plus geopolitical turmoil in Russia and the Middle East.
The company's shares closed down 4.4 percent amid a broad market sell-off Wednesday.
St. Jude Medical is one of the three biggest players in a cluster of medical device manufacturers in the Twin Cities. The group includes Fridley-based Medtronic and divisions of Boston Scientific, a Natick, Mass.-based manufacturer with large operations in Arden Hills and Maple Grove. All three companies compete in the market for pacemakers and defibrillators. St. Jude employs about 3,000 in Minnesota.
The company said its third-quarter profit adjusted for one-time restructuring and impairment charges amounted to $281 million, or 97 cents a share. That's up from adjusted per-share profit of 90 cents a year ago.
Including one-time charges, St. Jude's bottom line was $238 million, or 82 cents a share, compared with a profit of $262 million, or 90 cents per share, a year ago.
Sales were $1.37 billion, up 3 percent from $1.34 billion a year ago.
The company said it expects fourth-quarter sales to range from $1.39 billion to $1.47 billion and adjusted per-share profit to be in a range of $1.02 to $1.04.
For the full year, St. Jude now expects its profit to be in a range of $3.97 to $3.99 a share, narrowing from its previous guidance of $3.96 to $4.01 a share. It dropped its full-year sales guidance to a range of $5.57 billion to $5.65 billion, below the previous range of $5.64 billion to $5.76 billion.
One bright spot in the third quarter was sales of products to treat atrial fibrillation, which rose 8 percent from the year-ago quarter to $253 million, fueled by 12 percent growth outside the United States.
St. Jude's latest results were hurt in part by a suspension of sales of the Portico heart valve replacement system while the company investigated a potential problem with part of the valve. The company determined a redesign was not necessary and Portico sales will resume in the current quarter.
"The resumption of Portico implants is encouraging," Sanford Bernstein analyst Derrick Sung said in a research note. However, he added, "the ability for St. Jude to accelerate top-line growth to the mid-to-high single digits has now come into question."
Staff writer Evan Ramstad and Reuters contributed to this report.
Christopher Snowbeck • 612-673-4744
