As U.S. markets have slowed with hospitals buying less, device makers have been looking toward overseas markets to bolster their revenue from cardiac rhythm management devices such as pacemakers and ICDs.
But there may be new indication that those markets may not be as rock solid.
Last week, St. Jude Medical (NYSE: STJ) reported its third-quarter earnings and while most already know about the remarkable bit of news CEO Dan Starks made, another nugget of data may have been ignored by many.
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And that is the fact that on a constant currency basis, removing the fluctuations associated with currency movements, St. Jude Medical’s overseas revenue of ICDs fell 3 percent compared to the same quarter a year ago. Including unfavorable currency movements that had an impact of $17 million, the company garnered $165 million in third quarter from international sales of ICDs.
Someone who didn’t miss this data point is Morgan Stanley analyst David Lewis.
In a research note Monday titled, “One Week Into Earnings And … US Deceleration,” Lewis writes the following:
It is worth noting that international CRM markets are increasingly showing the same weakness afflicting the US business. For example, St. Jude’s OUS ICD business declined [constant currency/year-over-year] for the first time ever this quarter. Only two years ago, this business was growing in the high teens.
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In other words, he noted the CRM market “remains weak and stabilization is proving elusive.”
[Photo Credit: World Economy Slowing Down from Big Stock Photo]
