St. Jude Medical, Inc. (NYSE: STJ) today reported sales and net earnings for the fourth quarter and year ended December 31, 2011.
Fourth Quarter and Full-Year Sales
The Company reported net sales of $1.407 billion in the fourth quarter of 2011, an increase of 4 percent over the $1.350 billion in the fourth quarter of 2010. Foreign currency translation comparisons increased fourth quarter sales by approximately $18 million. On a currency neutral basis, net sales grew 3 percent over the fourth quarter of 2010.
Net sales in 2011 were $5.612 billion compared to $5.165 billion in 2010, an increase of 9 percent. Foreign currency translation comparisons increased full-year 2011 sales by about $183 million. On a currency neutral basis, net sales grew 5 percent over the prior year.
Commenting on the Company's results and growth program, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, "During the fourth quarter, we grew net adjusted EPS by 15% and continued to expand our investment in medical device innovation. St. Jude Medical is committed to developing medical device technology which helps reduce the cost of medical care at the same time it helps improve patient outcomes. Our FAME II clinical trial for the benefit of patients who suffer from coronary artery disease and our market release of the world's only quadripolar ICD system for patients who suffer from heart failure demonstrate that we are delivering on this commitment."
Cardiac Rhythm Management (CRM)
Total CRM sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $728 million for the fourth quarter of 2011, a 4 percent decrease compared to the fourth quarter of 2010. After adjusting for the impact of foreign currency, total CRM sales decreased 6 percent. Total CRM product sales for the full-year 2011 were $3.034 billion, essentially equal to 2010. On a currency neutral basis, total CRM sales declined 3 percent from the prior year.
Of that total, ICD product sales were $436 million in the fourth quarter, a 5 percent decrease compared to the fourth quarter of 2010. ICD revenue growth decreased 6 percent after adjusting for the impact of foreign currency. ICD product sales for the full-year 2011 were $1.824 billion, flat when compared to 2010. On a constant currency basis, total ICD sales declined 2 percent from the prior year.
Fourth quarter pacemaker sales were $292 million, a 4 percent decrease compared to the fourth quarter of 2010. After adjusting for the impact of foreign currency, pacemaker sales decreased 5 percent. Total pacemaker sales for 2011 were $1.210 billion, approximately equal to pacemaker sales in 2010. On a constant currency basis, total pacemaker sales declined 5 percent from the prior year.
Atrial Fibrillation (AF)
AF product sales for the fourth quarter totaled $218 million, a 13 percent increase over the fourth quarter of 2010. On a constant currency basis, AF product sales increased 11 percent in the fourth quarter of 2011. For the full-year 2011, AF product sales were $822 million, an increase of 16 percent over the prior year. On a constant currency basis, AF product sales increased 12 percent in 2011.
Neuromodulation
St. Jude Medical sales of neuromodulation products were $121 million in the fourth quarter of 2011, up 12 percent from the comparable quarter of 2010. On a constant currency basis, neuromodulation product sales increased 11 percent in the fourth quarter of 2011. Total neuromodulation product sales for 2011 were $419 million, up 10 percent over the prior year. On a constant currency basis, neuromodulation product sales increased 8 percent in 2011.
Cardiovascular
Total cardiovascular sales, which primarily include vascular and structural heart products, were $340 million for the fourth quarter of 2011, an 18 percent increase over the fourth quarter of 2010. On a constant currency basis, total cardiovascular product sales increased 16 percent in the fourth quarter of 2011. Total cardiovascular product sales for 2011 were $1.337 billion, up 29 percent over 2010. On a constant currency basis, cardiovascular product sales increased 24 percent in 2011.
Sales of vascular products in the fourth quarter of 2011 were $190 million, an 8 percent increase from the fourth quarter of 2010. Total vascular product sales for 2011 were $740 million, up 10 percent from 2010.
Total structural heart product sales for the fourth quarter of 2011 were $150 million, up 35 percent compared with the fourth quarter of 2010. Total structural heart product sales for 2011 were $597 million, up 64 percent compared to 2010.
Fourth Quarter and Full-Year Earnings Results
In the fourth quarter, the Company recognized after-tax charges of $102 million, or $0.32 per diluted share, related to ongoing restructuring actions that began in the second quarter to realign certain activities in our CRM business, non-cash intangible asset impairment charges and costs associated with continuing efforts to improve our sales and sales support organization. Also during the fourth quarter, the Company recognized a $9 million after-tax contribution, or $0.03 per share, to the St. Jude Medical Foundation.
Including these items, reported net earnings for the fourth quarter of 2011 were $163 million, or $0.51 per share. This compares to reported net earnings for the fourth quarter of 2010 of $206 million or $0.62 per share. For the full-year 2011, reported net earnings were $864 million, or $2.64 per share.
Excluding these items, adjusted net earnings for the fourth quarter of 2011 were $274 million, or $0.86 per diluted share. Adjusted net earnings for the full-year 2011 were $1.074 billion or $3.28 per 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.
First Quarter and Full-Year 2012 Sales and Earnings Guidance
During a conference call today, St. Jude Medical will provide its range for revenue expectations for the first quarter and full-year 2012 by product category.
The Company expects its consolidated adjusted net earnings for the first quarter of 2012 to be in the range of $0.82 to $0.84 per diluted share and for full-year 2012 in the range of $3.43 to $3.48. A reconciliation of the Company's quarterly and annual guidance is provided in the schedule below.
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