Cardiac rhythm management -- the use of devices like pacemakers and ICDs to control unhealthy heart rhythms -- was largely what built Medtronic (NYSE:MDT) and Guidant (NYSE:GDT) into major medical device players. It looks like St. Jude (NYSE:STJ) is becoming the third company in the lineage.

Fueled by sales of ICDs (implantable cardioverter defibrillators), St. Jude reported that first-quarter sales climbed 21% to roughly $664 million. ICD sales grew 72% in the period to $206 million, more than offsetting a sluggish and disappointing performance in the pacemaker business (down 3% to $217 million).

Growth in ICD sales was stronger in the U.S. (up 81%) than abroad (up 52%), and St. Jude management was cautiously optimistic that it had once again gained share in the fast-growing market.

Although ICDs are the most important story at St. Jude these days, the company has other growing business segments, as well. Products designed to treat atrial fibrillation are a major opportunity for the company, and that segment grew 55% in the quarter to about $59 million. While St. Jude management hopes that atrial fibrillation will contribute more than $225 million in revenue for the full year, it predicts that 2008 will be the year that this market will really be significant for the company.

Leaving aside a purchased R&D charge, the company improved margins across the board. Gross margin was boosted by the higher contribution of ICDs in the total revenue mix, and operating margin improved with tighter expense control. As a result, St. Jude was able to post a 38% increase in net income.

While St. Jude management is publicly downplaying the notion, the upcoming merger of Guidant and Johnson & Johnson (NYSE:JNJ) could be a short-term boon to the company. Mergers like these almost always create some level of turbulence, and St. Jude should have the opportunity to pluck some high-quality former Guidant sales reps who, for one reason or another, don't want to stay on with the merged company.

Although I'm not sure there's any credible valuation metric out there that would make St. Jude shares look "cheap," there's no doubt that it is posting high-quality growth. What's more, while Medtronic and Guidant will always be fierce competitors, the market for ICDs is so large and growing so fast that I think St. Jude investors can continue to expect above-market growth for some time to come.

Better still, St. Jude's position in cardiac surgery, sealants, and atrial fibrillation suggests that the coming years might reveal a little more balance in growth as the company becomes less dependent upon ICDs to boost revenue and earnings.

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Fool contributor Stephen Simpson owns shares of Johnson & Johnson. The Fool has a disclosure policy.