St. Jude Medical Releases 2016 Fourth Quarter Results

St. Paul, Minn.-based St. Jude Medical Inc. has released its financial results for the fourth quarter of fioscal year 2015 which ended Jan. 2.

The company expects to report consolidated net sales of approximately $1.447 billion for the fourth quarter of 2015, which is an increase of 7 percent on a constant currency basis, consistent with guidance of 7 to 8 percent consolidated constant currency growth.

Fourth quarter sales of Thoratec products were approximately $136 million, exceeding previously issued guidance of $125 million to $130 million, driven by continued strength in the United States and the launch of Heartmate 3 left ventricular assist system in Europe. Full fourth quarter 2015 Thoratec sales of $143 million represent comparable constant currency quarterly sales growth of 15 percent over fourth quarter 2014 sales of $128 million.

When comparing net sales for the full fourth quarter of 2015 to the combined net sales of both St. Jude Medical and Thoratec for the fourth quarter 2014 and adjusting for foreign currency, our comparable constant currency sales decreased 1 percent.

Commenting on preliminary fourth quarter 2015 sales, CEO Michael T. Rousseau said, “We continue to execute our innovation-based growth strategy and made good progress during the fourth quarter in our areas of focus. The pressures to our business that we communicated heading into the quarter were partially offset by continued growth in atrial fibrillation and neuromodulation as well as strong sales from the recent Thoratec acquisition. In 2015, we set the stage to continue to expand our global leadership in heart failure, atrial fibrillation and neuromodulation in 2016.”

St. Jude Medical operates on a 52/53-week fiscal year convention with an extra 53rd week occurring approximately every six years. Accordingly, the company’s fiscal fourth quarter 2014 had one extra week of sales compared to fiscal fourth quarter 2015. In order to provide similar sales comparisons on a year-over-year basis the company recommends adjusting for the impact of this convention. While the calculation is not precise, the company estimates that these five fewer selling days in the fourth quarter of 2015 negatively impacted results by approximately 5 to 6 percentage points.

Cardiac Rhythm Management (CRM)
Fourth quarter CRM sales were approximately $580 million, a decrease of 10 percent on a constant currency basis over the fourth quarter of 2014. Global results were impacted by lower sales in the U.S. as the company is facing increased pressure in the MRI conditional category of products. This decline was partially offset by solid results in countries where MRI conditional products are offered and continued strong performance in CRT driven by Multipoint Pacing technology in Europe.

Atrial Fibrillation (AF)
Atrial fibrillation product sales for the fourth quarter were approximately $276 million, an increase of 4 percent on a constant currency basis over the fourth quarter of 2014 driven by continued adoption of our Flexability and Tacticath ablation catheters.

Cardiovascular
Total cardiovascular sales, which primarily include structural heart and vascular products, were $327 million for the fourth quarter of 2015, which is an increase of 2 percent on a constant currency basis over the fourth quarter of 2014. Cardiovascular growth was primarily due to a successful initial launch of all sizes of our Portico transcatheter aortic valve implantation system in Europe as well as strong contributions from Amplatzer Amulet left atrial appendage occluder in Europe and the Optical Coherence Technology (OCT) product portfolio.

Neuromodulation
Fourth quarter sales of neuromodulation products were approximately $128 million, an increase of 9 percent on a constant currency basis over the fourth quarter of 2014. Neuromodulation growth was driven by the St. Jude Medical Burst technology offering in Europe as well as the Protégé spinal cord stimulation system with upgradeable features in the United States.

Fourth Quarter Earnings Results
St. Jude Medical now expects its fourth quarter adjusted earnings per share to be in the range of $1.01-$1.02, narrowing the range from $1.00-$1.02. Adjusted earnings per share for the fourth quarter exclude net after-tax charges primarily related to acquisition-related costs, ongoing restructuring activities and amortization of intangible assets.