St. Jude Medical's first-quarter net sales, defibrillator revenues fall below guidance

By Lisa Kerner

Erie, Pa., April 4 - St. Jude Medical, Inc. expects to report net sales of approximately $784 million in the first quarter of 2006, an increase of 18% compared to the first quarter of 2005, but below company guidance of net sales in the $799 million to $839 million range.

St. Jude said it expects consolidated first quarter earnings per share to be in the range of $0.35 to $0.36, which includes the impact of stock compensation expense of approximately $0.03 per share.

First quarter results were impacted by lower than expected revenues from implantable cardioverter defibrillators, which are expected to be $262 million. While this is a 27% increase over the comparable period in 2005, it falls below the company's guidance.

St. Jude said it believes that first quarter implantable cardioverter defibrillators sales reflect a greater than anticipated slowdown in U.S. market growth. In reaction to this, the company will begin a detailed customer review to determine what affected sales.

"While most of our business continues to meet or exceed expectations, the events in the marketplace over the past year have led to increased volatility and have made ICD [implantable cardioverter defibrillators] market growth patterns in the United States less predictable," chairman, president and chief executive officer Daniel J. Starks said in a company news release.

"We are very pleased with the continued strength across our multiple growth platforms and excited about the many new cardiac rhythm management products set to be introduced this year." Revenues for all other product categories are expected to meet or slightly exceed previous guidance for the first quarter of 2006. First quarter pacemaker sales are expected to total $221 million, a 2% increase over the first quarter of 2005, and atrial fibrillation product sales for the period are expected to be $74 million, a 25% increase over the comparable period in 2005.

Total sales of cardiology products for the first quarter are expected to reach $111 million, flat with the same period in 2005.

St. Jude said total cardiac surgery sales for the first quarter of 2006 are expected to be $74 million, an increase of 3% over the comparable period in 2005.

Sales of neuromodulation products for the first quarter are expected to total $42 million, with no neuromodulation sales during the first quarter of 2005.

St. Jude Medical, based in St. Paul, Minn., provides medical device technology and services to cardiac, neurological and chronic pain patients.

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