Second-quarter profit more than doubled at St. Jude Medical Inc., the result of continued strong demand for its heart-related devices.
The Little Canada-based company on Wednesday raised its outlook for the rest of the year based in part on the quarterly performance.
And its top executive, responding to analysts' questions about the growing amount of dealmaking in the industry, said St. Jude doesn't feel pressured to grow through acquisitions, though it has recently done two.
Consolidation and deals in medical devices are driven in part by cost pressures shaped by the new federal health law and other industry conditions. They gained even more attention when Fridley-based Medtronic Inc., the industry's biggest player, in mid-June said it was buying an Irish-based competitor for $43 billion.
"One thing that always comes to my mind when people talk about size, you think about the largest bureaucratic organizations, I think about some portions of the U.S. government," St. Jude CEO Daniel Starks said to analysts. "The level of efficiency, the level of effectiveness, is suboptimal and sometimes the larger an organization is, the harder it is to be effective."
He also said, "We've got an absolute focus and a laser focus, and this is something that we've been working on for a long time."
The company's second-quarter net income was $270 million, or 93 cents a share, up from $115 million, or 40 cents a share, a year ago.
Adjusted earnings, which exclude one-time charges and credits, amounted to $295 million, or $1.02 a share, compared to $275 million, or 96 cents a share, a year ago. The results beat Wall Street expectations by two cents, but St. Jude shares still fell nearly 1 percent on Wednesday, closing at $67.66.
Sales increased 3 percent to $1.45 billion, led by a 2 percent jump in cardiac rhythm management products, its largest product category, to $733 million. Sales of products treating atrial fibrillation, an abnormal heart flutter, grew 8 percent to $257 million.
During the period, St. Jude closed on its $375 million acquisition of the portion of Atlanta-based CardioMEMS Inc. that it didn't already own. CardioMEMS makes an implantable heart failure monitoring device. Starks called the CardioMEMS product a "breakthrough technology."
Earlier this week, St. Jude announced a $200 million acquisition of NeuroTherm Inc., a maker of therapies for the management of chronic pain, a move that will boost St. Jude's chronic pain management business. Sales of its existing neuromodulation products dipped 1 percent in the latest quarter to $107 million.
In raising its full-year guidance, St. Jude said it now expects sales to be about $30 million higher, in the range of $5.64 billion to $5.76 billion. It lifted its earnings-per-share forecast by a penny to a range of $3.96 to $4.01.