St. Jude Medical’s Q2 Results Beats Forecast, Shares Gain (STJ)

Cardiovascular medical devices maker, St. Jude Medical Inc. (NYSE: STJ) reported on Wednesday that its fiscal second-quarter profit plunged 53% as higher debt repayment expenses, charges related to restructuring and lower sales due to unfavorable trends in foreign exchange market, weighed on the bottom line.

Shares of St. Jude Medical, however, rallied as the Company posted better-than-expected both earnings and revenue. The Company also provided outlook which matched with analysts’ expectation.

For the full-fiscal year, the Company lifted the lower end of earnings outlook by 2 cents a share and is now anticipating EPS of $3.70 to $3.73.

For the fiscal third quarter, St. Jude Medical expects earnings to be in the range of 88 cents to 90 cents a share, matching analysts’ estimation of 88 cents a share, according to a data compiled by Thomson Reuters.

The ST. Paul MN based Company reported net income of $115 or 40 cents a share for the fiscal second quarter, down from $244 million or 78 cents a share, in the year-earlier quarter.

Stripping out onetime items such as restructuring and debt retirement charges, the Company earned 96 cents on non-GAAP basis, up from 88 cents, posted in the same quarter of last fiscal year.

Earlier in April, the Company projected earnings to be in the range of 93 cents to 95 cents a share, which was in-line with the Street’s expectation, at that moment.

Sales slipped 0.5% to $1.4 billion; however, on constant currency basis, sales rose 2%. Analysts’ consensus estimate was for $1.32 billion.

Gross margin remained unchanged at 72.8%.

Total sales of cardiac-rhythm products, which include pacemakers and ICDs, fell 3.8%. Pacemaker sales plunged 8%.

Total sales in cardiovascular segment, which include structural and vascular heart products, remained flat.

Just last month, Credit rating agency, Standard & Poor’s cut its outlook on St. Jude to negative from stable, citing company’s mounting debt and declining revenue. The rating agency, however, reaffirmed “A” rating on the Company, at that time.