UPDATE 2-St. Jude's Q4 profit beats estimates; sees strong 2013
* 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, but the medical device maker's shares dipped amid skepticism that its markets would improve significantly.
St. Jude shares initially fell in early Wednesday trading, but recovered to little changed at $39.70 on the New York Stock Exchange. They have gained 6 percent since the company said earlier this month its earnings would beat forecast.
The company 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 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 it needs to 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.
Of the company's 2013 outlook, he said: "If we were going to err, we were going to err on the side of being conservative."
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.