St. Jude discusses Q2 results, sees net earnings dip

St. Jude Medical ($STJ) discussed its Q2 results Wednesday morning and reported net sales of $1.447 billion, an increase of 10% over the same period last year. However, the company also saw net earnings of $241 million or $0.72 per share versus $254 million or $0.77 per share during Q2 2010.

"St. Jude Medical delivered record sales during the second quarter," CEO Daniel Starks said in a statement. "We are making good progress implementing our new growth drivers and diversifying our growth portfolio. Although sales in the U.S. were down 2% due primarily to weakness in the U.S. cardiac rhythm management market, international sales increased 23% and now represent the majority of our business."

Indeed, total cardiac rhythm management sales, which include ICD and pacemaker products, were $793 million for the quarter, a modest 1% increase compared with the same period 2010. As the company notes, total CRM sales for the Q2 grew 3% after adjusting for the one-time benefit of Boston Scientific's suspension of sales of ICD products in the U.S. in 2010.

The topic of the slowing CRM market came up a number of times during the call, as it is a problem that affects St. Jude and several competitors. Starks said he wished the CRM were more predictable, "but it sure as heck hasn't been." When asked whether the company would "right-size" in the face a possibly permanently slowing CRM space, Starks said St. Jude is proactive in maintaining the right balance and will restructure as appropriate. Unprompted, he added that the recent move by companies to integrate their sales forces is merely copying something St. Jude did in 2001. They saw an example of what works well and decided they would do it, too.

Back in April, Medtronic announced it was combining its U.S. cardiac and vascular group sales as of May 1 with David Roberts at the helm of the new 2,700-person organization. 

Meanwhile, Abbott Labs ($ABT) saw its worldwide sales rise 9% to $9.6 billion. This number was a bit higher than Wall Street expectations for $9.57 billion, as Reuters notes.

- see the St. Jude release
- check out the Abbott release
- read the Reuters report

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