UPDATE 3-St. Jude Medical net falls on charges

* Adjusted EPS 59 cents; Street view 58 cents

* Sales $1.16 bln vs $1.08 bln

* Cuts fourth-quarter outlook

* Stock firms in early trading (Adds CFO interview, analyst comment, byline, updates stock)

By Debra Sherman

CHICAGO, Oct 21 (Reuters) - St. Jude Medical Inc (STJ.N) reported lower quarterly earnings on Wednesday due to charges, but sales rose and the company repeated its view that its long- term goals were intact despite difficult market conditions.

The medical device maker, which lowered its third-quarter outlook earlier this month, also reduced its full-year forecast, noting significant price pressure in its key markets for cardiac rhythm management products (CRM), including heart pacemakers and implantable cardioverter defibrillators, better known as ICDs.

Third-quarter net earnings fell to $166.9 million, or 48 cents per share, from $184.7 million, or 53 cents per share, a year ago.

Adjusted earnings per share were 59 cents. On that basis, analysts on average expected 58 cents, according to Thomson Reuters I/B/E/S.

Third-quarter sales rose to $1.16 billion from $1.08 billion a year ago, with sales of CRM products rising 2 percent. Excluding the impact of foreign exchange translations, CRM sales rose 5 percent in the quarter.

U.S. revenue was lower than expected, partly because about 50 U.S. hospitals did not make their usual end-of-quarter purchases of CRM products.

These end-of-quarter sales represent a material portion of quarterly sales, Chief Executive Dan Starks said on a conference call.

He said those hospitals did not buy either because they did not have the capital and decided to maintain lower inventories than they have done historically, or because they wanted an unusual price discount.

"In those circumstances, the right thing for us to do for our business was to walk away from those quarter-end purchases and we did," he told analysts. "And that obviously put us under tremendous pressure and was a material contribution to our earnings -- to our sales shortfall here on the CRM side, but the long-term it's the right thing to do for the business."

The company lowered its full-year outlook to between $2.41 and $2.43 per share from its previous outlook of $2.48 to $2.54.

Fourth-quarter earnings were expected to be in a range between 61 cents and 63 cents per diluted share.

"Although it is realistic to expect the sales environment to continue to be competitive and difficult, we are confident that we are fully capable of generating the level of sales we need with CRM products to support total corporate double-digit sales growth measured on a constant currency basis in 2010 and beyond," Starks said.

"If we're going to make a mistake on our guidance, we're going to make it on the side of being conservative."

In an interview with Chief Financial Officer John Heinmiller, he said he had a high degree of confidence the company can achieve its long-term profit objectives through the top line.

But management will continue to hold the line on expenses and aim to expand margins further.

"There are a lot of ways they can drive (profit) growth ... what the market is looking for is top line growth," said analyst Tim Nelson of FAF Advisors.

"They're in damage control mode, but they did a credible job of explaining the shortfall."

St. Jude shares, which tumbled on Tuesday after competitor Boston Scientific Corp (BSX.N) posted weaker-than-expected results, were up $1.01 at $34.17 in midday New York Stock Exchange trading. (Reporting by Debra Sherman; editing by John Wallace, Maureen Bavdek and Andre Grenon)