ST. PAUL, Minn. -- Medical device maker St. Jude Medical Inc. reported third-quarter earnings Wednesday that beat expectations, though company shares slumped as the executives warned that the company could receive a regulatory warning over a California manufacturing plant.
On a conference call with analysts Chief Executive Dan Starks warned that the company's California-based defibrillator plant was inspected by Food and Drug Administration staffers. Starks said the visit could result in a warning letter to the company, which could negatively impact sales.
St. Jude shares fell $2.74, or 6.4 percent, to $42.94 in morning trading.
The company said sales fell 4 percent in the third quarter to $1.33 billion, due to austerity measures in Europe and a decrease in heart procedures in the U.S. Sales of the company's best-selling products, implantable heart defibrillators, fell 7 percent to $412 million. The devices use electrical shocks to correct dangerous irregular heartbeats that can cause heart attacks.
Net income fell to $176 million, or 56 cents per share, from $227 million, or 69 cents per share, a year earlier. Excluding various one-time expenses and charges, the company would have earned 83 cents per share. That was slightly better than the average forecast of analysts polled by FactSet for earnings of 81 cents per share on revenue of $1.34 billion.
St. Jude narrowed its full-year earnings guidance to between $3.42 and $3.44 per share. Previously, the company forecast earnings between $3.40 and $3.45. Analysts expect full-year earnings per share of $3.43, on average.
The company also announced it would repurchase up to $300 million in shares from investors.