St. Jude Medical
Total sales were up 20%, with a major contribution from the company's cardiac rhythm management (CRM) segment. Past stumbles by competitors Medtronic
St. Jude management estimates that during the first half of the year, the company took between two and three points of ICD market share from its competitors. And that's on top of the two points it took last year. Not only does St. Jude have a larger share of the market, but management estimates that the CRM market, of which ICD is a large part, is still growing at a rate of 7% to 9%. Sometimes you can have your cake and eat it too.
Even sales in the biggest segment, cardiovascular, where it competes with Abbott Laboratories
With increased sales have come better profit margins. Gross profit margin was up 140 basis points over the year-ago quarter, which shouldn't be a big surprise. St. Jude has improved its gross margin in each of the last 10 years. While operating and net income margin growth has been lumpier, each of these measures is also much improved over that time. The company should be able to make further improvements as it embarks on a long-term plan to revamp its manufacturing system.
A lot of that increased gross margin found its way to the bottom line -- net income was up 49% year over year. That's some serious Rule Breaker-sized growth.
St. Jude may be the patron saint of lost causes, but investors in St. Jude Medical have found cause to rejoice.
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