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What to Expect from St. Jude Medical’s Earnings in 2Q16

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Dec. 4 2020, Updated 10:53 a.m. ET

Analysts’ estimates

St. Jude Medical (STJ) accounts for ~3.9% of the iShares U.S. Medical Devices ETF (IHI). It has managed to exceed analysts’ earnings estimates for the last several quarters. Share price movement is usually impacted by the deviation of a company’s results from analysts’ estimates.

In 1Q16, St. Jude Medical exceeded analysts’ EPS (earnings per share) estimate of $0.89 as well as the revenue estimate of ~$1.4 billion.

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According to analysts’ estimates, the company’s 2Q16 EPS are expected to come in at approximately $1.06. St. Jude Medical expects to report 2Q16 EPS of $1.05–$1.07. The company expects a lower impact of currency fluctuations in 2016 and thus has provided updated guidance of $4.01–$4.11 EPS for 2016.

Profit margin estimates

For 2Q16, Wall Street analysts project that St. Jude Medical’s net profit margin should rise to $304 million. This estimate represents ~19.6% of total revenue, compared to ~15.8% in the previous quarter.

On a YoY (year-over-year) basis, the company’s 2Q16 net profit margin is expected to rise by ~12.5%. The gross profit margin for the quarter is expected to be above 69%, which translates to YoY growth of ~8.6%. The company’s gross profit margin is expected to be impacted by the slowdown in the company’s US cardiac rhythm management business and a marginal impact of currency headwinds.

In their most recent quarters, St. Jude Medical’s peers Medtronic (MDT), Boston Scientific (BSX), and Edwards Lifesciences (EW) reported EPS growth of 77%, 38.5%, and 25.2%, respectively.

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