St. Jude Medical third quarter net sales increase 7% to $1.240 billion

St. Jude Medical, Inc. (NYSE: STJ) today reported sales and net earnings for the third quarter ended October 2, 2010.

Third Quarter Sales

The Company reported net sales of $1.240 billion in the third quarter of 2010, an increase of 7 percent compared with the $1.160 billion in the third quarter of 2009. Revenue for the third quarter increased 8 percent after adjusting for the impact of foreign currency. Foreign currency translation comparisons decreased third quarter sales by approximately $10 million.

Commenting on the Company's results, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, "Our third quarter results reinforce our conviction that our growth program is on track and that St. Jude Medical is well positioned to continue growing long term at a superior rate. We now have raised our 2010 EPS guidance range for the third time in three quarters. We have good momentum as we prepare to finish up the year and look to 2011."

Cardiac Rhythm Management (CRM)

Total CRM sales, which include ICD and pacemaker products, were $738 million for the third quarter of 2010, a 7 percent increase compared with the third quarter of 2009. On a currency neutral basis, total CRM sales grew 8 percent over the comparable quarter in 2009.

Of that total, ICD product sales were $439 million in the third quarter, a 13 percent increase compared with the third quarter of 2009. ICD revenue grew 14 percent after adjusting for the impact of foreign currency.

Third quarter pacemaker sales were $299 million, consistent with the third quarter of 2009 on a reported and constant currency basis.

Atrial Fibrillation (AF)

AF product sales for the third quarter of 2010 totaled $169 million, an 8 percent increase over the third quarter of 2009. On a currency neutral basis, total AF sales grew 9 percent over the comparable quarter in 2009.

Neuromodulation

Neuromodulation product sales were $93 million in the third quarter of 2010, up 11 percent from the comparable quarter of 2009 on a reported and constant currency basis.

Cardiovascular

Total cardiovascular sales, which primarily include vascular closure and heart valve products, were $240 million for the third quarter of 2010, a 4 percent increase over the third quarter of 2009 on a reported and constant currency basis.

Sales of vascular closure products in the third quarter of 2010 were $86 million.

Heart valve product sales for the third quarter of 2010 were $78 million.

Third Quarter Earnings Results

In the third quarter, the Company recorded after-tax charges of $11 million, or $0.03 per diluted share, related primarily to closing and other costs associated with the acquisition of LightLab Imaging, Inc. and recorded $12 million, or $0.04 per diluted share, of in-process research and development expenses related to the acquisition of certain pre-development technology assets.

Including these items, reported net earnings for the third quarter of 2010 were $208 million, or $0.63 per share. This compares to reported net earnings for the third quarter of 2009 of $167 million or $0.48 per share.

In accordance with GAAP, reported net earnings for the third quarter 2010 do not include any benefit from the research and development tax credit, which has yet to be extended for 2010. Including the benefit of this adjustment and excluding the third quarter charges, adjusted net earnings for the third quarter of 2010 were $238 million, or $0.72 per diluted share. A reconciliation of the Company's non-GAAP adjusted net earnings per share to the Company's GAAP net earnings per share is provided in the schedule at the end of the press release.

Fourth Quarter and Full-Year 2010 Sales and Earnings Guidance

During a conference call today, St. Jude Medical will provide its range for revenue expectations for the fourth quarter by product category and update its expectations related to full-year earnings per share.

The Company expects its consolidated adjusted net earnings for the fourth quarter of 2010 to be in the range of $0.72 to $0.74 per diluted share and for full-year 2010 consolidated adjusted net earnings to be in the range of $2.98 to $3.00 per diluted share, a $0.09 increase on the top end of the guidance from the full-year 2010 guidance we gave during our second quarter earnings call. A reconciliation of the Company's quarterly and annual guidance is provided in the schedule below.