St. Jude Medical, Inc. (NYSE: STJ) today reported sales and net earnings for the fourth quarter and full year ended Dec. 28, 2013.
Fourth quarter highlights:
Net sales increased by approximately 6 percent on a constant-currency basis over the fourth quarter of 2012 Completed the acquisition of Nanostim, which adds the world's first leadless pacemaker to the St. Jude Medical product portfolio Cardiac Rhythm Management sales increased 5 percent on a constant-currency basis over the fourth quarter of 2012 Adjusted net earnings per share increased by 8 percent, compared with the fourth quarter of 2012 and 12 percent on a constant-currency basis
Fourth Quarter and Full-Year 2013 Sales
The company reported net sales of $1.422 billion in the fourth quarter of 2013, a 4 percent increase over net sales of $1.372 billion in the fourth quarter of 2012. Unfavorable foreign currency translation comparisons decreased fourth quarter sales by approximately $27 million. On a constant-currency basis, net sales increased by approximately 6 percent over the fourth quarter of 2012.
For the full-year 2013, net sales were $5.501 billion, compared with $5.503 billion in 2012, which is flat with the prior year. Unfavorable foreign currency translation comparisons decreased full-year 2013 sales by about $101 million. On a constant-currency basis, net sales increased 2 percent over the prior year.
Commenting on the company's financial results, St. Jude Medical Chairman, President and Chief Executive Officer Daniel J. Starks said, "In addition to delivering on our goal to accelerate sales growth throughout the year, we achieved significant EPS leverage with adjusted net earnings per share growing 12 percent on a constant currency basis. In 2014, we will continue to focus on addressing the challenges of today's health care environment by delivering innovative solutions that improve patient outcomes while reducing the economic and clinical burdens of some of the world's most expensive, epidemic diseases."
Cardiac Rhythm Management (CRM)
Total CRM sales, which include implantable cardioverter defibrillator (ICD) and pacemaker products, were $705 million for the fourth quarter of 2013, a 3 percent increase compared with the fourth quarter of 2012. After adjusting for the impact of foreign currency, total CRM sales increased 5 percent. Total CRM product sales for the full-year 2013 were $2.783 billion, down approximately 2 percent from 2012. On a constant-currency basis, total CRM sales declined 1 percent from the prior year.
Of that total, ICD product sales were $442 million in the fourth quarter, a 5 percent increase on a reported and constant-currency basis compared with the fourth quarter of 2012. ICD product sales for the full-year 2013 were $1.741 billion, flat when compared with 2012. On a constant-currency basis, total ICD sales increased 1 percent over the prior year.
Fourth quarter pacemaker sales were $263 million, a 1 percent increase compared with the fourth quarter of 2012. On a constant-currency basis, pacemaker product sales increased 4 percent in the fourth quarter. Total pacemaker sales for 2013 were $1.042 billion, down 6 percent compared with pacemaker sales in 2012. On a constant-currency basis, total pacemaker sales declined 4 percent from the prior year.
Atrial Fibrillation (AF)
AF product sales for the fourth quarter totaled $252 million, a 5 percent increase over the fourth quarter of 2012. On a constant-currency basis, AF product sales increased 8 percent over the fourth quarter of 2012. For the full-year 2013, AF product sales were $957 million, an increase of 7 percent over the prior year. On a constant-currency basis, AF product sales increased 9 percent in 2013.
Cardiovascular
Total cardiovascular sales, which primarily include vascular and structural heart products, were $350 million for the fourth quarter of 2013, a 4 percent increase over the fourth quarter of 2012. On a constant-currency basis, cardiovascular sales increased 7 percent in the fourth quarter. Total cardiovascular product sales for 2013 were $1.335 billion, an increase of 1 percent over the prior year. On a constant-currency basis, cardiovascular product sales increased 3 percent in 2013.
Total structural heart product sales for the fourth quarter of 2013 were $167 million, a 12 percent increase on a constant-currency basis over the fourth quarter of 2012. Total structural heart product sales for 2013 were $631 million, an increase of 3 percent compared with 2012 or 5 percent on a constant-currency basis.
Sales of vascular products in the fourth quarter of 2013 were $183 million, a 2 percent increase on a constant-currency basis over the fourth quarter of 2012. Total vascular product sales for 2013 were $704 million, a 2 percent increase on a constant-currency basis.
Neuromodulation
St. Jude Medical sales of neuromodulation products were $115 million in the fourth quarter of 2013, a 2 percent increase on a reported and constant-currency basis over the prior year. Total neuromodulation product sales for 2013 were $426 million, a 1 percent increase over 2012 sales.
Fourth Quarter and Full-Year Earnings Results
In the fourth quarter, the company recognized after-tax charges of $156 million, or $0.52 per share, primarily relating to continued actions associated with our previously announced restructuring activities. The company also recognized an income tax charge of $15 million, or $0.05 per share, related to adjustments to prior year uncertain tax positions in foreign jurisdictions. Including these items, reported net earnings for the fourth quarter of 2013 were $123 million or $0.42 per share, compared with reported net earnings for the fourth quarter of 2012 of $120 million or $0.39 per share. For the full-year 2013, reported net earnings were $723 million, or $2.49 per share compared with reported EPS of $2.39 for the full-year 2012.
Adjusted net earnings for the fourth quarter of 2013 were $294 million, or $0.99 per share, an 8 percent increase compared with adjusted net earnings for the fourth quarter of 2012 of $0.92 per share. For the full-year 2013, adjusted net earnings were $1.094 billion, or $3.76 per share, an 8 percent increase over adjusted EPS of $3.48 for the full-year 2012. A reconciliation of the company's non-GAAP adjusted net earnings per share to the company's GAAP net earnings per share is provided in the schedules at the end of the press release.
First Quarter and Full-Year 2014 Sales and Earnings Guidance
