Businesswire07.21.16
Abbott Laboratories certainly is making a wise investment choice in St. Jude Medical Inc.
The latter company, which is being purchased by Abbott for roughly $25 billion, released its second-quarter earnings this week, and the numbers are up—significantly. Net sales jumped 11 percent to $1.56 billion and international revenue rose 10 percent as reported (7 percent on a constant currency basis). Diluted earnings per share (EPS) of 83 cents fell 19 percent as reported, but adjusted EPS of $1.06 increase 7 percent on a constant currency basis.
“We continued to build momentum during the second quarter by bringing innovative products to our global markets. The strong performance in international sales gives us confidence that where we have a full portfolio, we can deliver top-tier growth. One of the major highlights of our quarter was the announcement of our pending merger with Abbott. We continue to be confident and excited about the potential of our combined organization and the powerful impact we can have on delivering industry leading innovation to physicians and patients around the world,” St. Jude Medical President and CEO Michael T. Rousseau said.
As previously announced, St. Jude Medical has changed its sales reporting to more closely align with how the company manages the business in five key areas: atrial fibrillation, heart failure, neuromodulation, cardiovascular and traditional cardiac rhythm management.
Atrial fibrillation sales for the second quarter (ended July 2) rose 13 percent to $324 million due to strong global TactiCath and FlexAbility ablation catheter sales. Heart failure revenue, which includes sales of cardiac resynchronization therapy (CRT) products, HeartMate ventricular assist devices and the CardioMEMS HF System, skyrocketed 48 percent to $384 million, primarily due to incremental net sales associated with ventricular assist devices, acquired through the company's acquisition of Thoratec. On a comparable constant currency basis, HF product sales decreased 1 percent compared to the prior year quarter. Second quarter results reflect strong global growth in ventricular assist devices, offset by the impact of U.S. cardiac rhythm managementsales weakness on St. Jude's cardiac rhythm therapy products.
Neuromodulation products sales spiked 19 percent to $140 million, driven by the St. Jude Medical Burst technology offering in international markets, the U.S. launch of the Axium system as well as the introduction of the Infinity DBS system and directional lead in Europe.
Total cardiovascular sales remained fairly flat at $319 million. The unit benefited from strong demand for the Portico Transcatheter Aortic Valve Implantation System in Europe and the company's percutaneous coronary intervention optimization strategy, which includes products such as OPTIS optical coherence tomography products and PressureWire fractional flow reserve technology.
Cardiac rhythm management (CRM) sales, which include single and dual chamber implantable cardioverter defibrillator (ICD) and pacemaker products, fell 8 percent to $395 million. After adjusting for the impact of foreign currency, traditional CRM sales decreased 7 percent. Global results continue to be impacted by lower sales in the United States, partially offset by continued adoption of our MRI conditional product portfolio in countries where they are offered.
In the second quarter the company recognized net after-tax charges of $67 million, or 23 cents per diluted share, primarily related to amortization of intangible assets and acquisition-related costs. Including these items, reported net earnings for the second quarter of 2016 were $238 million or 83 per share, compared with reported net earnings for the second quarter of 2015 of $290 million or $1.02 per share. Excluding these items, adjusted net earnings for the second quarter of 2016 were $305 million or $1.06 per share, compared with adjusted net earnings for the second quarter of 2015 of $293 million or $1.03 per share.
Due to the planned merger with Abbott, St. Jude Medical is not providing financial guidance for fiscal 2016.
The latter company, which is being purchased by Abbott for roughly $25 billion, released its second-quarter earnings this week, and the numbers are up—significantly. Net sales jumped 11 percent to $1.56 billion and international revenue rose 10 percent as reported (7 percent on a constant currency basis). Diluted earnings per share (EPS) of 83 cents fell 19 percent as reported, but adjusted EPS of $1.06 increase 7 percent on a constant currency basis.
“We continued to build momentum during the second quarter by bringing innovative products to our global markets. The strong performance in international sales gives us confidence that where we have a full portfolio, we can deliver top-tier growth. One of the major highlights of our quarter was the announcement of our pending merger with Abbott. We continue to be confident and excited about the potential of our combined organization and the powerful impact we can have on delivering industry leading innovation to physicians and patients around the world,” St. Jude Medical President and CEO Michael T. Rousseau said.
As previously announced, St. Jude Medical has changed its sales reporting to more closely align with how the company manages the business in five key areas: atrial fibrillation, heart failure, neuromodulation, cardiovascular and traditional cardiac rhythm management.
Atrial fibrillation sales for the second quarter (ended July 2) rose 13 percent to $324 million due to strong global TactiCath and FlexAbility ablation catheter sales. Heart failure revenue, which includes sales of cardiac resynchronization therapy (CRT) products, HeartMate ventricular assist devices and the CardioMEMS HF System, skyrocketed 48 percent to $384 million, primarily due to incremental net sales associated with ventricular assist devices, acquired through the company's acquisition of Thoratec. On a comparable constant currency basis, HF product sales decreased 1 percent compared to the prior year quarter. Second quarter results reflect strong global growth in ventricular assist devices, offset by the impact of U.S. cardiac rhythm managementsales weakness on St. Jude's cardiac rhythm therapy products.
Neuromodulation products sales spiked 19 percent to $140 million, driven by the St. Jude Medical Burst technology offering in international markets, the U.S. launch of the Axium system as well as the introduction of the Infinity DBS system and directional lead in Europe.
Total cardiovascular sales remained fairly flat at $319 million. The unit benefited from strong demand for the Portico Transcatheter Aortic Valve Implantation System in Europe and the company's percutaneous coronary intervention optimization strategy, which includes products such as OPTIS optical coherence tomography products and PressureWire fractional flow reserve technology.
Cardiac rhythm management (CRM) sales, which include single and dual chamber implantable cardioverter defibrillator (ICD) and pacemaker products, fell 8 percent to $395 million. After adjusting for the impact of foreign currency, traditional CRM sales decreased 7 percent. Global results continue to be impacted by lower sales in the United States, partially offset by continued adoption of our MRI conditional product portfolio in countries where they are offered.
In the second quarter the company recognized net after-tax charges of $67 million, or 23 cents per diluted share, primarily related to amortization of intangible assets and acquisition-related costs. Including these items, reported net earnings for the second quarter of 2016 were $238 million or 83 per share, compared with reported net earnings for the second quarter of 2015 of $290 million or $1.02 per share. Excluding these items, adjusted net earnings for the second quarter of 2016 were $305 million or $1.06 per share, compared with adjusted net earnings for the second quarter of 2015 of $293 million or $1.03 per share.
Due to the planned merger with Abbott, St. Jude Medical is not providing financial guidance for fiscal 2016.