St. Jude Medical Q4: Thoratec Product Sales Beat Estimates, Cardiac Rhythm Underperforms
St. Jude Medical announced preliminary results for its fourth-quarter earnings that show sales increases in atrial fibrillation, cardiovascular products, and neuromodulation, which offset an expected 10 percent dip in cardiac rhythm. Better-than-expected product sales from recently acquired Thoratec put St. Jude’s Q4 revenue at $1.45 billion, just short of the $1.48 billion projected by analysts.
In October, St. Jude adjusted its year-end earnings forecast, citing “currency headwinds,” reported The Wall Street Journal (WSJ). Overall, the company expected currency to impact its final quarter earnings by as much as $75 million to $85 million and forecasted per-share profit of $1 to $1.02, 5 to 7 cents down from analyst-projected $1.07.
At the JP Morgan Healthcare Conference, St. Jude confirmed its earlier expectations, putting per-share profits at $1.01 and estimated fourth quarter revenue at $1.45 billion. According to St. Jude CEO Michael Rousseau, slow sales in St. Jude’s cardiac rhythm products were somewhat countered by steady growth in other segments.
“The pressures to our business that we communicated heading into the quarter were partially offset by continued growth in atrial fibrillation and neuromodulation as well as strong sales from the recent Thoratec acquisition,” said Rousseau in a press release.
St. Jude acquired Thoratec, developer of left ventricular assist devices (LVADs), in a $3.4 billion deal last July, and its product sales brought in $136 million, exceeding the $125 to $130 million that was projected.
St. Jude CFO Don Zubray told WSJ, “The [Thorotec] acquisition is extremely important for us. It puts us in a leadership position in the heart-failure market.”
Last April, St. Jude acquired Spinal Modulation, Inc. for $175 million following a deal to buy NeuroTherm for approximately $200 million in 2014. Sales for St. Jude’s neuromodulation products grew 9 percent in 2015’s fourth quarter, reported the WSJ.
“We continue to execute our innovation-based growth strategy and made good progress during the fourth quarter in our areas of focus,” said Rousseau, who took over as CEO following Daniel Stark’s retirement on Jan. 1. “In 2015, we set the stage to continue to expand our global leadership in heart failure, atrial fibrillation and neuromodulation in 2016.”
The preliminary results were announced on Jan. 13 and the webcast is currently available in the Investor Relations section of the St. Jude Medical website.
St. Jude Medical will hold its quarterly conference call to discuss the financial results in full on Jan. 27, 2016.