04.08.15
St. Jude Medical Inc. experienced a bit of déjà vu last year.
Growth at the St. Paul, Minn.-based device behemoth followed a pattern set in 2013, where second-half earnings exceeded first half proceeds. Sales and adjusted net earnings were up for both the fourth quarter and year (despite a slight setback in Q3), an achievement that is giving St. Jude executives confidence for the company’s 2015 prospects.
“We really have the momentum now as we go into 2015,” senior vice president John Heinmiller said recently. “…It’s a very exciting set of circumstances for us.”
A profitable set as well: Fourth-quarter net income rose 2.5 percent to $123 million, or 42 cents per share (99 cents per share when one-time costs are excluded) and revenue climbed 3.6 percent to $1.42 billion. In 2014, the company booked a $1 billion profit on sales of $5.6 billion, with atrial fibrillation (AF) and neuromodulation products contributing significantly to the increase.
Fourth-quarter AF sales (ended Dec. 31, 2014) jumped 12 percent to $283 million (17 percent on a constant currency basis) and full-year proceeds rose 9 percent to $1.04 billion (11 percent on a constant currency basis). Neuromodulation sales in the final three months of 2014 swelled 8 percent on a reported basis and 10 percent on a constant currency basis compared with Q4 2013. Product revenue for 2014 grew 3 percent to $437 million, according to St. Jude.
Cardiac Rhythm Management (CRM) and Cardiovascular sales both struggled at year’s end, with CRM revenue (including implantable cardioverter defibrillator and pacemaker product proceeds) falling 3 percent to $685 million compared with Q4 2013 and cardiovascular sales (encompassing structural heart and vascular product revenue) slipping 1 percent to $347 million.
Full-year CRM sales remained flat at $2.79 billion but rose 2 percent from the prior year on a constant currency basis. ICD (implantable cardioverter defibrillator) revenue comprised more than half of that total ($1.74 billion) but remained flat compared with 2013. On a constant currency basis, ICD sales grew 1 percent over the prior year despite falling 4 percent in the fourth quarter to $426 million.
Fourth-quarter pacemaker sales slid 2 percent to $259 million but increased 3 percent on a constant currency basis. Total pacemaker revenue last year was flat ($1.04 billion) but rose 2 percent on a constant currency basis from 2013.
Cardiovascular sales grew 3 percent in Q4 2014 and 1 percent during the entire year, reaching $1.34 billion. Structural heart product sales were down 1 percent in the fourth quarter but finished the year a percentage point above 2013 levels, at $639 million (3 percent on a constant currency basis). Fourth-quarter vascular device revenue, on the other hand, shot up 7 percent on a constant currency basis, helping to give the division a 2 percent lead in total year sales ($709 million) over 2013.
Even with its CRM growth engine running at full speed, however, St. Jude executives predict the company will lose at least $325 million in sales to currency fluctuations due to the stronger dollar. Thus, in response to investor demand, St. Jude is signing currency hedging contracts this year to smooth out temporary fluctuations in values.
Growth at the St. Paul, Minn.-based device behemoth followed a pattern set in 2013, where second-half earnings exceeded first half proceeds. Sales and adjusted net earnings were up for both the fourth quarter and year (despite a slight setback in Q3), an achievement that is giving St. Jude executives confidence for the company’s 2015 prospects.
“We really have the momentum now as we go into 2015,” senior vice president John Heinmiller said recently. “…It’s a very exciting set of circumstances for us.”
A profitable set as well: Fourth-quarter net income rose 2.5 percent to $123 million, or 42 cents per share (99 cents per share when one-time costs are excluded) and revenue climbed 3.6 percent to $1.42 billion. In 2014, the company booked a $1 billion profit on sales of $5.6 billion, with atrial fibrillation (AF) and neuromodulation products contributing significantly to the increase.
Fourth-quarter AF sales (ended Dec. 31, 2014) jumped 12 percent to $283 million (17 percent on a constant currency basis) and full-year proceeds rose 9 percent to $1.04 billion (11 percent on a constant currency basis). Neuromodulation sales in the final three months of 2014 swelled 8 percent on a reported basis and 10 percent on a constant currency basis compared with Q4 2013. Product revenue for 2014 grew 3 percent to $437 million, according to St. Jude.
Cardiac Rhythm Management (CRM) and Cardiovascular sales both struggled at year’s end, with CRM revenue (including implantable cardioverter defibrillator and pacemaker product proceeds) falling 3 percent to $685 million compared with Q4 2013 and cardiovascular sales (encompassing structural heart and vascular product revenue) slipping 1 percent to $347 million.
Full-year CRM sales remained flat at $2.79 billion but rose 2 percent from the prior year on a constant currency basis. ICD (implantable cardioverter defibrillator) revenue comprised more than half of that total ($1.74 billion) but remained flat compared with 2013. On a constant currency basis, ICD sales grew 1 percent over the prior year despite falling 4 percent in the fourth quarter to $426 million.
Fourth-quarter pacemaker sales slid 2 percent to $259 million but increased 3 percent on a constant currency basis. Total pacemaker revenue last year was flat ($1.04 billion) but rose 2 percent on a constant currency basis from 2013.
Cardiovascular sales grew 3 percent in Q4 2014 and 1 percent during the entire year, reaching $1.34 billion. Structural heart product sales were down 1 percent in the fourth quarter but finished the year a percentage point above 2013 levels, at $639 million (3 percent on a constant currency basis). Fourth-quarter vascular device revenue, on the other hand, shot up 7 percent on a constant currency basis, helping to give the division a 2 percent lead in total year sales ($709 million) over 2013.
Even with its CRM growth engine running at full speed, however, St. Jude executives predict the company will lose at least $325 million in sales to currency fluctuations due to the stronger dollar. Thus, in response to investor demand, St. Jude is signing currency hedging contracts this year to smooth out temporary fluctuations in values.