St. Jude posts street-beating Q1

St. Jude Medical (NYSE:STJ) released 1st quarter 2016 results that beat the Street, despite seeing profits slip from the same quarter last year after its acquisition of Thoratec.

St. Paul, Minn.-based St. Jude Medical reported profits of $95 million, or 33¢ per share, on sales of $1.45 billion for the 3 months ended April 2, 2016.

That amounts to a 63.7% bottom-line slide as sales grew 7.7% compared with the same period in 2015.

Adjusted to exclude 1-time items, earnings per share were 90¢; Analysts on Wall Street were looking for an adjusted EPS of 88¢. The company also topped the Street’s estimate for revenue by approximately $18 million.

In the quarter, the company recognized net after-tax charges of $164 million, or $0.57 per share, primarily related to acquisition-related costs and restructuring activities.

“In the 1st quarter, we delivered sales and adjusted earnings per share at or above the high end of our guidance. With 10 product approvals and associated launches in key regions around the world, we demonstrated our commitment to bringing lifesaving products to patients while driving sales momentum in the areas of atrial fibrillation, heart failure and neuromodulation,” CEO Michael Rousseau said in a press release.

Last week, St. Jude hung on to a win over Johnson & Johnson(NYSE:JNJ) subsidiary Biosense Webster after a federal appeals court found that Biosense and the rep, Jose de Castro, breached the terms of his contract with St. Jude.

Originally a field technician for St. Jude, de Castro was promoted in 2009 to sales rep, signing a 3-year contract in 2011, according to court documents. Later that year, Biosense began courting de Castro, hoping his defection would also bring Sequoia Hospital’s business. Biosense offered to cover de Castro for any repercussions from breaking his deal with St. Jude; a day after he signed on with that company in February 2012, Biosense filed for declaratory judgment to invalidate the St. Jude contract, according to the documents.

But St. Jude won summary judgment from Judge Ann Montgomery of the U.S. District Court for Minnesota on all but the damages portion of the case; a jury later awarded St. Jude damages for the cost of replacing de Castro and for lost profits; including pre-judgment interest and legal fees, Biosense was on the hook for about $1.6 million, court records show.

Material from Reuters was used in this report.

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