ST. PAUL, Minn. (AP) — Medical device maker St. Jude Medical reported a 4.7 percent increase in first-quarter profit on reduced taxes, which offset declining sales of its heart-shocking implants.
The company edged past Wall Street profit expectations and reiterated its full-year earnings guidance.
The maker of pacemakers, heart-shocking defibrillators and other medical devices has been plagued over the past few years by recalls of wires for several heart devices. But Leerink Swann analyst Daniella Antalffy said in a note that those problems seem to be "subsiding a bit," based on the latest results.
Revenue from the company's heart device unit fell 8 percent to $678 million in the last quarter, roughly in line with analyst estimates.
Net income rose to $223 million from $212 million reported in the first quarter of 2012. Excluding one-time charges the company would have earned $263 million, or 92 cents per share.
That was one cent better than the average estimate of 91 cents per share from analysts polled by FactSet.
Sales fell slightly to $1.34 billion from $1.39 billion a year earlier. Analysts were expecting sales of $1.36 billion.
St. Jude reaffirmed full year earnings guidance between $3.68 and $3.73.
St. Jude stopped selling its Riata wires in late 2010 because of evidence the silicone coating of the wires could wear and break down over time, increasing the chance a defibrillator could malfunction and either deliver a shock when none is needed, or fail to shock the patient's heart when it is not beating properly. It recalled the wires in late 2011.
Last year the St. Paul, Minn., company recalled two other wires, QuickSite and QuickFlex, because of similar problems. Around 79,000 Riata leads are implanted in U.S. patients, and the FDA ordered St. Jude to conduct a three-year study to learn more about the risk of insulation failure.
In November the FDA released an inspection report on the facility where St. Jude manufactures the Durata wires. The inspectors noted a number of problems with the company's testing procedures, indicating staffers were not following their own quality-control guidelines.