DOW JONES NEWSWIRES
St. Jude Medical Inc. (STJ) swung to a fourth-quarter loss on
acquisition charges amid rising sales in its heart-rhythm and
cardiovascular businesses.
The medical-device maker posted a net loss of $194 million, or
56 cents a share, compared with year-earlier net income of $118
million, or 34 cents. Excluding charges, such as write-downs and
other charges related to last month's $533 million acquisition of
MediGuide, earnings rose to 60 cents from 54 cents.
Revenue grew 11% to $1.13 billion.
Last month, citing the stronger dollar, St. Jude lowered its
earnings target to 56 cents to 60 cents a share and projected sales
of $1.05 billion to $1.12 billion.
The impact of currency fluctuations has been a concern because
St. Jude derives nearly half of its sales from overseas markets and
traditionally hadn't hedged against currency shifts.
Sales at the heart-rhythm unit, which includes defibrillators
and pacemakers, rose 7% with implantable cardioverter defibrilator
sales climbing 8% and pacemakers growing 5%.
The U.S. market for implantable cardioverter defibrilators,
which provide shocks to treat the heart when it beats at a
life-threatening speed, has been struggling for years to overcome
the effects of a 2005 industry recall. But Chief Executive Daniel
J. Starks said in recent months that St. Jude had seen the ICD
market become more stable.
St. Jude is one of three major ICD makers, along with Medtronic
Inc. (MDT) and Boston Scientific Corp. (BSX).
In the long term, the forecast for the ICD business looks
sluggish. Indeed, a Deutsche Bank survey of 35 U.S. doctors who
implant pacemakers and defibrillators projected low-single-digit
defibrillator growth this year.
But, St. Jude's acquisitions of Radi Medical and MediGuide will
bulk up the company's business for cardiovascular devices and tools
to treat the rhythm disorder atrial fibrillation.
Looking ahead, St. Jude now sees 2009 earnings of $2.48 to
$2.54, up from December's reduced forecast of $2.47 to $2.52. It
also projected a first-quarter profit of 57 cents to 59 cents a
share, while analysts expected 59 cents.
Shares closed Monday at $31.68 and there was no premarket
trading. The stock is down about one-third since September.
-By Katherine Wegert, Dow Jones Newswires; 201-938-5400;
katherine.wegert@dowjones.com
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