St. Jude 1Q Profit Slips On Costs From Buyout

ST. PAUL, Minn. (AP) -- Medical device maker St. Jude Medical Inc. said its first-quarter net income slipped 2 percent, as costs from last year's acquisition of AGA Medical Inc. outweighed revenue gains.

The maker of pacemakers and artificial heart valves also raised its full-year earnings guidance. Its stock climbed 99 cents, or 1.9 percent, to $51.99 in morning trading

The St. Paul, Minn., company reported net income of $233.4 million, or 71 cents per share, in the three months that ended April 2. That compares with net income of $238.6 million, or 73 cents per share, in the same quarter last year.

Adjusted earnings, which exclude one-time costs and gains, were 80 cents per share.

Revenue climbed 9 percent to $1.38 billion.

Analysts surveyed by FactSet expected, on average, earnings of 78 cents per share on $1.38 billion in revenue. Analysts typically exclude one-time items from their estimates.

St. Jude said it had $28 million in after-tax charges from acquisition and integration costs tied to the AGA Medical deal. It finished a $1.04 billion buyout of the Plymouth, Minn., heart device maker in November.

St. Jude's selling, general and administrative expenses rose 16 percent to $513.3 million, and research and development costs also climbed by the same percentage to $175.7 million.

The company's cardiovascular revenue, which now include AGA Medical results, rose 28 percent to $327 million from last year's first quarter.

Cardiac rhythm management revenue rose 1 percent to $762 million.

Changes in foreign currency exchange rates also increased revenue by about $17 million in the quarter.

For the second quarter, St. Jude expects adjusted earnings between 83 and 85 cents per share. For the full year, it forecast earnings per share of between $3.28 and $3.33, up from a January forecast of $3.25 to $3.30 per share.

Analysts had expected earnings of 84 cents per share for the second quarter and $3.29 for the year.

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