Keeping Pace at St. Jude

In St. Jude Medical's (NYSE: STJ  ) third-quarter earnings release yesterday, company CEO Daniel Starks said the company expected annual growth of at least 15% and noted that the medical device maker's long-term growth program is on track. From an operations standpoint, the company's results were fairly impressive.

Apparently this was not enough to please traders, who have since pushed shares down 10%.

After adjusting for non-recurring items, St. Jude posted a 21% increase in its EPS, as net sales climbed by 13% compared to the company's year-ago quarter. All five of the company's key business lines were instrumental in this improvement. Three of the five lines produced double-digit gains in quarterly sales.

The two biggest areas of business, implantable cardioverter defibrillators (ICD) and pacemakers, both performed quite well. ICD product sales surged 17% versus the prior year Q3, and pacemaker sales checked in with a 9% rise over the same time period.

Aside from the pullback in share price, there may be additional opportunity in St. Jude for investors who have been eyeing the stock. Earlier this week one of St. Jude's chief rivals, Medtronic (NYSE: MDT  ) , issued a product advisory that could open the door for St. Jude and Boston Scientific (NYSE: BSX  ) to steal future market share.

During St. Jude's conference call, Starks did say, "Experience has taught us how hard it is to predict what the consequences will be when another company issues a product advisory." 

Since the market's response to St. Jude yesterday, it is evident that expectations have been set high for this stock. However, the balanced growth that the company has reported leads me to believe that it is in fact on track to push its share price higher in subsequent quarters.

For related Foolishness check out:


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 538890, ~/Articles/ArticleHandler.aspx, 9/23/2014 2:37:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement