A strong pipeline of new products combined with increasing market share for its cardiac rhythm devices helped push St. Jude Medical Inc. to another solid quarter.
The Little Canada-based med-tech company said Wednesday that overall net sales and adjusted net earnings were up for the fourth quarter. It is a trend that should continue well into 2015, said St. Jude Senior Vice President John Heinmiller.
"We really have the momentum now as we go into 2014 to really deliver growth," Heinmiller said in an interview. "And 2014 is looking like another year, like 2013 was, where the second half has a chance of being better than the first half. It's a very exciting set of circumstances for us."
Net income increased to $123 million, or 42 cents per share, from $120 million, or 39 cents per share. Excluding one-time costs, the company earned 99 cents per share. Revenue grew 3.6 percent, to $1.42 billion from $1.37 billion.
"In addition to delivering on our goal to accelerate sales growth throughout the year, we achieved significant [earnings per share] leverage," said Daniel Starks, St. Jude Medical's chief executive.
With consistently solid earnings and new products like the world's first leadless pacemaker now part of its product portfolio, St. Jude Medical is proving to be an attractive long-term option for investors, according to Edward Jones analyst Jeff Windau, even in a medical technology market still feeling pressure to lower prices.
"We like some of their new products. They have innovative technologies that are gaining traction," Windau said. "St. Jude is getting positive responses."
In 2014 the company expects to earn between $3.94 and $3.99 per share excluding one-time costs, with revenue between $5.6 billion and $5.75 billion.
In a note to investors, analyst Danielle Antalffy of Leerink Swann Research said several business areas beat estimates, including revenues for cardiac rhythm management, atrial fibrillation and neuromodulation. St. Jude's guidance for 2014, she said, "seems highly achievable and should set [St. Jude] up nicely for continued quarterly outperformance in 2014."
Joshua Jennings of Cowen and Co. called St. Jude's results "strong" and told investors that the company's sales of implantable defibrillators and cardiovascular products beat expectations.
Like a lot of medical technology companies, St. Jude got its start treating heart conditions but has branched out over the years to treat other chronic illnesses and provide pain management. Still, about half of the company's total business remains tied to treating faulty heart rhythms, Heinmiller said. So, as the worldwide market for such technology continues to improve, and St. Jude continues to launch new products in that area, the numbers should keep rising.
"I think that's the theme really overall here at St. Jude Medical," Heinmiller said. "The innovation-based market strategy combined with better growth dynamics is giving us the opportunity improve our growth rates."
The Associated Press contributed to this report.