Mixed Bag for St.Jude Medical Sees Cardiac Rhythm Business Propped Up by The Rest

St. Jude Medical, Inc. has reported sales and net earnings for the second quarter ended June 29, 2013.

Background

We don’t cover many company quarterly financial statements, but St.Jude is one that always spikes our interest as we watch with fascination a company that is building its business while enduring an ongoing Riata ICD lead hangover.

The Company reported net sales of $1.403 billion in the second quarter of 2013, slightly less than net sales of $1.410 billion in the second quarter of 2012. On a currency neutral basis, net sales increased by approximately 2 percent from the second quarter of 2012. So what underpins this slight decline? To find out we need to examine individual business unit/product area sales. Note all comments are on a constant currency basis.

Cardiac Rhythm Management (CRM)

Total CRM sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $718 million for the second quarter of 2013, a 2 percent decrease compared to the second quarter of 2012 after adjusting for the impact of foreign currency.

Of that total, ICD product sales were $454 million in the second quarter, flat in real terms.

Pacemaker sales were $264 million, a 6 percent decrease compared to the second quarter of 2012.

Atrial Fibrillation (AF)

AF product sales of $237 million showed an altogether healthier 12 percent increase over the equivalent period a year ago.

Cardiovascular

Total cardiovascular sales, which primarily include vascular and structural heart products, at $340 million increased 3 percent compared to the second quarter of 2012.

Total structural heart product sales for the second quarter of 2013 were $162 million, up approximately 4 percent.

Sales of vascular products in the second quarter of 2013 were $178 million, a 3 percent increase.

Neuromodulation

Sales of neuromodulation products were $108 million in the second quarter of 2013, up approximately 2 percent from the prior year.

Company comments

St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, “During the second quarter, St. Jude Medical made good progress towards accelerating our sales growth on a sustainable basis. Our operating discipline, healthy balance sheet and strong cash flow will continue to allow us to fund disciplined acquisitions and return value to shareholders. We remain confident in our ability to deliver double-digit constant currency growth in 2013 adjusted earnings per share.”

Source: St.Jude Medical, Inc.