St. Jude takes earnings hit in Q1

St. Jude Medical has reported a 1 percent increase in sales, but an overall $21 million decrease in net earnings for the first quarter of 2012, which ended March 31.

The St. Paul, Minn.-based company reported net sales of $1.4 billion in the first quarter of 2012, an increase of 1 percent compared with $1.38 billion in the first quarter of 2011. Foreign currency translation comparisons decreased first quarter sales by approximately $7 million.

However, the net earnings for this past quarter were $212 million, compared with $233 million in the 2011 first quarter—a loss of $21 million.

Its total cardiac rhythm management (CRM) sales, which include implantable cardioverter-defibrillator (ICD) and pacemaker products, were $735 million for the first quarter of 2012, a 4 percent decrease compared with the first quarter of 2011. Of that total, ICD product sales were $450 million in the first quarter, a 3 percent decrease compared with the first quarter of 2011. First quarter pacemaker sales were $285 million, a decrease of 4 percent from the comparable quarter of 2011.

Atrial fibrillation product sales for the first quarter totaled $221 million, a 13 percent increase over the first quarter of 2011.

Total cardiovascular sales, which primarily include vascular and structural heart products, were $336 million for the first quarter of 2012, a 3 percent increase over the first quarter of 2011. Sales of vascular products during the first quarter of 2012 were $181 million, down 2 percent from the comparable quarter of 2011.

Structural heart product sales for the first quarter of 2012 were $155 million, an 8 percent increase over the first quarter of 2011.

During the first quarter of 2012, the company recorded after-tax charges of $29 million, primarily related to its previously announced restructuring actions initiated during the second quarter of 2011 to streamline manufacturing within the CRM business. This consists primarily of closing down operations at its location in Sweden, as well as costs associated with continuing efforts to leverage sales and sales support organizations.

In addition, St. Jude also recognized $25 million in after-tax charges related to a settlement involving a dispute over the final payments due under a license agreement involving the vascular closure product line.

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