Declines in St. Jude Medical Inc.'s large heart-rhythm business dragged down the Little Canada-based company's first-quarter profits by about 9 percent.
St. Jude reported net income Wednesday of $212 million, or 67 cents a share, as revenue grew 1 percent to $1.395 billion. Excluding certain items, and including a research tax credit that has yet to be extended for 2012, earnings came in at 86 cents a share.
That beat the consensus analysts' estimate of 83 cents, as compiled by Bloomberg.
Chief Financial Officer John Heinmiller said the company's sales beat the high end of its projections in three of four product categories -- atrial fibrillation, cardiovascular and neuromodulation.
"We would say we're off to a good start here for 2012, and now we just have to keep performing," Heinmiller said.
St. Jude executives acknowledged continuing concerns over the company's recalled Riata defibrillator lead but said they haven't seen a measurable impact on revenue.
The company took the lead, which connects the device to the heart, off the market in December 2010 after wires were found to have protruded through the outer insulation.
Rick Wise, an analyst with Leerink Swann Research, said St. Jude's first-quarter performance topped his expectations.
"It was an encouraging start to the year," Wise said. "It makes me more optimistic that their full-year goals are achievable."
Sales in cardiac rhythm management, which account for more than half of St. Jude's sales and include defibrillators and pacemakers, were $735 million for the first quarter. That was down 4 percent compared with the first quarter of 2011.
Atrial fibrillation product sales were $221 million, up 13 percent from the year-earlier period. In addition, neuromodulation sales were up 12 percent and cardiovascular sales, which include vascular and structural heart products, were $336 million -- up 3 percent from the first quarter of 2011.
St. Jude said it expects its consolidated adjusted net earnings for the second quarter of 2012 to be in the range of 86 cents to 88 cents per share, and it is raising its full-year 2012 guidance to be in the range of $3.44 to $3.49.
St. Jude shares fell 68 cents to $38.39.
James Walsh 612-673-7428