St. Jude profit beats forecasts, shares rise

(Reuters) - St. Jude Medical Inc (STJ.N) reported a higher quarterly profit that beat expectations as some of its smaller, newer businesses posted strong sales, sending the company's shares up 5.6 percent.

The medical device maker noted brisk demand for products that treat atrial fibrillation, a common heart disorder. Sales of cardiovascular devices and neurostimulators also did well, even as sales rose only 2 percent at its cardiac rhythm management (CRM) products unit, its largest business.

"Those other businesses did extremely well and show that they can pick up the slack for a weak CRM market," said Gabelli & Co analyst Jeff Jonas.

The cardiac rhythm management market, including pacemakers and implantable heart defibrillators, "hit a pothole" and has not recovered, Chief Executive Dan Starks told analysts on a conference call.

Nevertheless, he was upbeat, saying the company was on track to launch some new products or old products with new uses, such as a neurostimulator to treat migraine headaches, that can help sales grow for years to come.

"St Jude's challenge has always been to take the focus off the big business and refocus it on the smaller parts of the business," said Nuveen Asset Management analyst Tim Nelson.

Starks said the company was also on course to move its manufacturing facilities to lower-cost regions such as Costa Rica and Malaysia.

St. Jude has added about 1,000 employees during the past year, bringing its staff count to about 16,000 people, said Chief Financial Officer John Heinmiller.

He said the company will continue to add jobs as it introduces products, including so-called transcatheter heart valves -- prosthetic valves that can be replaced without open heart surgery.

New product launches slated for 2012 should help the company grow even as the heart rhythm management business remains stagnant, Heinmiller said.

"How this translates into employees, I don't have prediction at this point," he said.

In the third quarter, St. Jude's profit rose to $226.5 million, or 69 cents per share, from $208.4 million, or 63 cents per share, a year earlier. Excluding items, the company earned 78 cents per share, beating the average analyst expectation of 76 cents, according to Thomson Reuters I/B/E/S.

Sales rose 12 percent to $1.4 billion. Sales of products used to treat atrial fibrillation, the most common arrhythmia, rose 20 percent, while sales of cardiovascular products rose 37 percent.

The company forecast fourth-quarter net profit of 83 cents to 85 cents a share, which was a relief to many analysts who expected foreign exchange to hurt sales.

St. Jude shares rose 5.7 percent to $39.47 on the New York Stock Exchange.

(Reporting by Debra Sherman. Editing by Robert MacMillan)