UPDATE 3-St. Jude cost cutting pushes Q4 profit above estimates
* Fourth-quarter EPS 92 cents vs est 90 cents
* Expects 2013 EPS of $3.68-$3.73 vs est $3.62
Jan 23 (Reuters) - St. Jude Medical Inc forecast 2013 earnings above market estimates after reporting a better-than-expected fourth-quarter profit as it cut costs, and the company's shares initially fell in early trading Wednesday, but had trimmed losses by midday.
The medical device maker's shares have gained 6 percent on the New York Stock Exchange since the company said earlier this month its earnings would beat forecast.
St. Jude forecast 2013 earnings of $3.68 to $3.73 per share, above analysts' average estimate of $3.62, according to Thomson Reuters I/B/E/S.
"I'm surprised the stock is down, but previous guidance has been too aggressive and they've had to cut it, so I think there may be some concerns there," said Jeff Jonas, a portfolio manager at Gabelli Health and Wellness Trust, which owns St. Jude shares.
Chief Financial Officer John Heinmiller characterized the 2013 earnings-per-share forecast as conservative, noting the company will have completed a share buyback program by the end of the first quarter, so there will be a lower share count.
In addition, the company will have opportunities with new products in 2013 that it did not have in 2012, he said in a telephone interview.
Chief Executive Dan Starks said on a conference call that he believes the company gained share in its key market for implantable heart defibrillators, known as ICDs, during the fourth quarter and was optimistic that the market would improve in 2013.
Starks added, however, that market share will be confirmed when competitors Medtronic Inc and Boston Scientific Corp report their quarterly results.
"We see a stable market with opportunity for upside," Starks told analysts.
Fourth-quarter net sales fell about 2.5 percent to $1.37 billion, hurt by unfavorable foreign currency translation.
St. Jude Medical reduced its selling, general and administrative expenses 18 percent. It also cut research and development expenses 11 percent.
The heart device maker said on Jan. 9 that its fourth-quarter profit would exceed its forecast and Wall Street expectations, aided by cost cuts.
Net income fell to $120 million, or 39 cents per share in the fourth quarter, from $125 million, or 39 cents per share, a year earlier.
Excluding one-time items, the company earned 92 cents per share. Analysts expected a profit of 90 cents per share.
- Fired-up Republicans have edge in midterm turnout war
- Soldiers vie for power after Burkina Faso president quits |
- Branson to meet Virgin Galactic space team after crash |
- UK says will pay off part of World War One-era debt next year
- Kurdish peshmerga forces enter Syria's Kobani after further air strikes |