NEW YORK - St Jude Medical Inc warned on Tuesday that quarterly profit would miss its previous forecasts as hospitals bought fewer of its medical devices, sending its shares down nearly 14 percent.
The maker of pacemakers, defibrillators and other products pointed to pressures from the economy and healthcare reform leading to a slowdown in hospital buying.
Shares of rival heart device makers Medtronic Inc and Boston Scientific Corp slumped about 4 percent after the announcement.
We believe that macro economic factors coupled with the continued pressures surrounding healthcare reform resulted in changes in purchasing behavior among some of our hospital customers, St Jude Chief Executive Officer Dan Starks said in a statement.
In the preliminary third-quarter results, St Jude said it expected earnings per share, excluding items, of 57 cents to 58 cents, down from its prior forecast of 61 cents to 63 cents.
Analysts on average expected profit of 62 cents per share, according to Thomson Reuters I/B/E/S.
St Jude expects sales to rise a lower-than-expected 7 percent to about $1.16 billion.
Revenue for all its product categories, except for its neuromodulation business, came in below or at the low end of its expectations, the company said.
Sales in the cardiac rhythm management business, which includes implantable cardioverter defibrillator and pacemakers, are expected to inch up 2 percent to about $690 million.
Sales in the cardiovascular business, which mainly includes vascular closure and heart valve products, are expected to rise 11 percent to $230 million.
St Jude also plans to record third-quarter charges of $50 million to $55 million, or 9 cents to 10 cents per share, for severance costs and a writedown of investments.
The company will officially report third-quarter results on Oct. 21.
St Jude shares fell 13.9 percent to $32.91 in premarket trading from their Monday close of $38.24 on the New York Stock Exchange. (Reporting by Lewis Krauskopf, editing by Dave Zimmerman and Lisa Von Ahn)