St. Jude's Q2 produces mixed results, but CEO asserts progress

St. Jude Medical ($STJ) completed its 2013 second quarter with a heady mix of both sobering and promising news. The Minnesota devicemaker's net sales came in flat versus the same period over last year, profits plunged and cardiac rhythm management revenue continued a downward spiral. But some sectors such as atrial fibrillation and neuromodulation enjoyed solid, or at least moderate revenue growth.

Daniel Starks, the company's chairman, president and CEO, focused on the positive, framing the results with one word in mind: progress.

"During the second quarter, St. Jude Medical made good progress towards accelerating our sales growth on a sustainable basis," Starks said in a statement. "Our operating discipline, healthy balance sheet and strong cash flow will continue to allow us to fund disciplined acquisitions and return value to shareholders."

St. Jude's net earnings for the quarter hit the $115 million mark, a sharp drop from $244 million in net earnings in the 2012 second quarter, due in part to one-time charges. Net sales remained static, hitting $1.403 billion, a hair less than the $1.41 billion in net sales booked over the 2012 second-quarter.

Cardiac rhythm management sales (defibrillators and pacemakers) plunged 4%, to $718 million from $746 million in the second-quarter of 2012. Cardiovascular sales remained flat, year-over-year, at $340 million. But atrial fibrillation sales reached $237 million, a 9% rise over $218 million generated in the same period last year. Neuromodulation sales grew 2% to $108 million, compared to $106 million in the 2012 second-quarter.

St. Jude's second quarter has reflected a focus on international clinical trials and product approvals, following months of problems over Durata leads and hundreds of job cuts. The company has also looked to the future. In June, St. Jude invested $40 million in Spinal Modulation to access the company's promising pain management device. St. Jude gained exclusive rights to sell its Axium Neurostimulator System, which has a CE mark and will begin a large-scale U.S. trial later this year. If all goes well, St. Jude has an option to snatch up the company for $300 million.

- read the full earnings release

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