Sailing-Winds of change for America's Cup in Bermuda Triangle
HAMILTON, Bermuda, June 24 Mystery surrounds what next for the America's Cup if New Zealand win sailing's most prestigious prize in Bermuda next week.
(Recasts with CFO interview)
By Bill Berkrot
July 16 Heart device maker St. Jude Medical Inc said it has no plans to jump on the consolidation bandwagon that has swept the healthcare sector in recent months and is not seeking the type of "inversion" deal increasingly popular among U.S. companies seeking to lower taxes by re-basing abroad.
In the most recent such deal in the medical device sector, Medtronic Inc last month agreed to buy Covidien for $43 billion. The move will allow Medtronic to re-domicile to Ireland to take advantage of low corporate tax rates and to access cash overseas without having to pay high repatriation costs.
St. Jude's chief financial officer, Don Zurbay, said on Wednesday the company was open to deals if they fit with the therapeutic areas that are its focus, such as cardiac care. But a tax inversion strategy is not a priority.
"It really would have to be a deal that's highly strategic first, and if those benefits happen to be a part of it, that's great. But for us, we don't really feel the need," Zurbay said in a telephone interview, following the company's release of slightly better-than-expected quarterly results.
"We have a very low tax rate to begin with, so in our situation I don't think the benefits would be there on the tax side," he said.
"We've had good success in getting access to most of our cash over time, so for us it really hasn't been a big topic," he added.
Medtronic and other companies that have recently announced mergers have also cited a desire to get bigger in order to offer a wider array of products to hospital customers looking to cut costs and the number of vendors with which they do business.
Zurbay said St. Jude has no great desire to do a major acquisition simply to get bigger.
St. Jude has been mentioned by some investors as a potential takeover target by others looking to grow.
The company reported higher quarterly earnings and revenue, largely due to increased sales of its devices to treat abnormal heart rhythms.
Sales of implantable cardioverter defibrillators and pacemakers, St. Jude's biggest product category, rose 2 percent to $733 million in the second quarter ended June 28.
"The market itself has been flat," Zurbay said. "Our growth has come mostly from market share gains."
St. Jude, which competes against Medtronic and Boston Scientific Inc in the space, raised its full-year adjusted earnings per share forecast range by a cent to $3.96 to $4.01.
The company is targeting mid-to-high single-digit sales growth in 2015, fueled by the introduction of new products.
Excluding special items and including a tax benefit, adjusted earnings for the quarter were $1.02 per share, topping analysts' average expectations by 2 cents, according to Thomson Reuters I/B/E/S. Revenue rose 3 percent to $1.45 billion, edging past Wall Street estimates of $1.44 billion.
St. Jude Medical shares were down 0.4 percent at $67.98 on the New York Stock Exchange. (Additional reporting by Shailesh Kuber in Bangalore; Editing by Sriraj Kalluvila and Leslie Adler)
June 23 The U.S. Marine Corps said on Friday it resumed flight operations for Lockheed Martin Corp's F-35B fighter jets after temporarily suspended operations a day ago because of software problems.