St. Jude's largest segment has abnormal rhythm

St. Jude Medical (STJ) reported profit grew 14% and revenues were up 4%, both in line with the Street’s expectations. The medical-device company tightened the high-end its full-year sales forecast, but held its full-year earnings projection in place.

What really concerned investors today – the stock is down more than 9%– was that St. Jude lowered the top-end of revenue guidance for heart-rhythm devices such as pacemakers and defibrillators. This business segment, which makes up nearly 62% of total revenue, also reported considerably lower revenue growth compared to the last two years.

On the bright side, St. Jude reiterated its profit guidance for the full year, and gave a third-quarter forecast that was in line with estimates. The company also said it authorized a buyback of up to $500 million in stock.
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Peter J. Lazaroff