Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message| ()  

Executives

Daniel J. Starks - Chairman of the Board, Chief Executive Officer and President

John C. Heinmiller - Chief Financial Officer, Principal Accounting Officer and Executive Vice President

Eric S. Fain - President of Cardiac Rhythm Management Division

Analysts

Kristen M. Stewart - Deutsche Bank AG, Research Division

Michael N. Weinstein - JP Morgan Chase & Co, Research Division

David H. Roman - Goldman Sachs Group Inc., Research Division

Robert A. Hopkins - BofA Merrill Lynch, Research Division

David R. Lewis - Morgan Stanley, Research Division

Matthew Taylor - Barclays Capital, Research Division

St. Jude Medical (STJ) Q2 2012 Earnings Call July 18, 2012 8:00 AM ET

Operator

Welcome to the St. Jude Medical Second Quarter Earnings Conference Call. Hosting the call today is Dan Starks, Chairman, President and Chief Executive Officer of St. Jude Medical.

Before we begin, let me remind you that some of the statements made during this conference call may be considered forward-looking statements. The 10-K for fiscal year 2011 and quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2012, identify certain factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made this morning. The company does not undertake to update any forward-looking statement as a result of new information or future events or developments. The 10-K is available through the company or online.

During the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance. Tables reconciling these measures to most comparable GAAP measures are available in the press release or on the St. Jude Medical website at www.sjm.com. [Operator Instructions] It is now my pleasure to turn the floor over to Dan Starks.

Daniel J. Starks

Thank you, Christie. Welcome to the St. Jude Medical Second Quarter 2012 Earnings Conference Call. With me on the call today are John Heinmiller, Executive Vice President and Chief Financial Officer; Eric Fain, President of our Cardiac Rhythm Management division; Mike Rousseau, Group President; and Angie Craig, Vice President of Corporate Relations and Human Resources.

Our plan this morning is for John Heinmiller to provide his normal review of our financial results for the second quarter 2012 and to give sales and earnings guidance for the third quarter and full year 2012. I will then address several topics and open it up for your questions. Go ahead, John.

John C. Heinmiller

Thank you, Dan. Sales for the quarter totaled $1,410,000,000, down approximately 2% from the $1,446,000,000 reported in the second quarter of last year. Unfavorable foreign currency translations versus last year's second quarter reduced this quarter's sales by about $47 million. We will update our currency assumptions in a moment, but the actual average exchange rates during the second quarter were within our previous guidance range. On a constant currency basis, second quarter sales increased approximately 1% versus last year.

During the second quarter, we recognized $27 million or $0.08 per share in after-tax charges primarily in connection with our previously announced restructuring actions initiated during the second quarter of 2011 to streamline manufacturing within our CRM business, which consists primarily of closing down operations at our location in Sweden as well as costs associated with our continuing efforts to leverage our sales and sales support organizations. Comments during this call referencing second quarter results and guidance for full year 2012 results, including earnings per share amounts, will be exclusive of these items.

At the end of 2011, the federal research and development tax credit expired, and it has not yet been extended for 2012. In this circumstance, GAAP requires us to estimate and record our effective income tax rate, assuming that the R&D credit is not extended. For purposes of this conference call and our calculation of adjusted earnings, however, we are assuming that the tax credit will be extended for 2012 as in past years. As a result, comments referencing second quarter results and our guidance for 2012, including earnings per share amounts, are presented based on an effective income tax rate that contemplates the extension of the tax credit retroactive to January 1, 2012. To the extent that the federal research and development tax credit is not renewed, our effective income tax rate for 2012 would be higher than what is being presented during this call.

Earnings per share were $0.88 for the second quarter of 2012, a 4% increase over adjusted earnings per share of $0.85 in the second quarter of 2011. We estimate that on a constant currency basis, earnings per share increased approximately 11% versus last year.

Before we discuss our second quarter 2012 sales results by product category with guidance for the third quarter and the remainder of 2012, let me comment on foreign currency. As discussed on prior calls, the 2 main currencies influencing St. Jude Medical's operations are the euro and the yen. In preparing our sales and earnings guidance for the second quarter and full year 2012, we used exchange rates which assumed that each euro would translate into about $1.28 to $1.33 and that each JPY 80 to JPY 85 would translate into USD $1. For the second quarter, the actual average exchange rates for the euro and the yen were consistent with these assumptions.

In preparing our sales and earnings guidance for the third quarter and remainder of 2012, we are now assuming that each euro will translate into about $1.20 to $1.25 and that each JPY 78 to JPY 83 will translate into USD $1. This change in assumption regarding currency exchange rates decreases total forecasted sales for the second half of 2012 by about $35 million to $40 million, which we estimate will reduce earnings per share for the second half of 2012 by approximately $0.04 to $0.05.

Now for the sales by product category discussion for the second quarter. Total cardiac rhythm management sales, which includes revenue from both our ICD and pacemaker product lines, were $746 million, down 6% from last year's second quarter. On a constant currency basis, second quarter CRM sales were down 3% versus the second quarter of last year. For the second quarter, ICD sales were $459 million, down 4% versus last year's second quarter. On a constant currency basis, second quarter ICD sales were essentially equal to last year. US ICD sales were $267 million, down 2% versus last year's second quarter. International ICD sales were $192 million, down 6% versus the second quarter of 2011, including $15 million of unfavorable foreign currency translations. On a constant currency basis, international ICD sales increased 1% versus last year's second quarter.

For low-voltage devices, sales for the second quarter totaled $287 million, down 9% versus last year's second quarter. On a constant currency basis, second quarter low-voltage device sales decreased 5% versus last year. In the United States, pacemaker sales were $117 million, down 9% from last year's second quarter. In our international markets, pacemaker sales were approximately $170 million, down 9% versus the second quarter of 2011, including $11 million of unfavorable foreign currency translations. On a constant currency basis, international pacemaker sales decreased 3% versus last year's second quarter.

For the third quarter of 2012, we expect total CRM product sales to be in the range of $670 million to $700 million. For the full year 2012, we now expect CRM -- total CRM sales to be in the range of $2,860,000,000 to $2,900,000,000. At the midpoint of this guidance range, our 2012 CRM sales would be down approximately 2% on a constant currency basis versus 2011. This revised 2012 guidance range for St. Jude Medical assumes that the CRM market for calendar 2012 will decline about 3% to 4% on a constant currency basis and that St. Jude Medical will gain approximately 0.5 point of global CRM market share.

Atrial Fibrillation or AF product sales for the second quarter totaled $218 million, up 5% over the second quarter of last year. Unfavorable foreign currency translations reduced second quarter AF product sales by $6 million. On a constant currency basis, second quarter AF product sales increased 8% versus last year. During the second quarter, we experienced a slower uptake of AF capital equipment purchases, reflecting a more challenging hospital budget environment. We note that for the first half of 2012, on a constant currency basis, AF product sales increased 11% versus the first half of 2011.

For the third quarter of 2012, we expect AF product sales to be in the range of $200 million to $215 million, and we now expect our 2012 AF product sales to be in the range of $870 million to $895 million. This change in full year 2012 guidance reflects our revised currency exchange rate assumptions. At the midpoint of this guidance range, our 2012 AF product sales would be up approximately 10% on a constant currency basis versus 2011.

Total sales of cardiovascular products for the second quarter of 2012 were $340 million, including $12 million of unfavorable foreign currency translations. Excluding the impact of terminating a contract in Japan, under which St. Jude Medical distributed vascular products manufactured by a third party, second quarter 2012 sales of cardiovascular products increased on a constant currency basis approximately 7% versus last year's second quarter.

As discussed on prior calls, we now break out our sales of cardiovascular products into 2 categories: structural heart and vascular. Sales of heart valve products, along with the AMPLATZER Occluder products and left atrial appendage plug, are categorized as structural heart. Our vascular products include vascular closure products, FFR PressureWire, OCT products, vascular plugs and other vascular accessories.

For the second quarter of 2012, sales of structural heart products were $160 million, an increase of 5% over the second quarter of 2011 or 9% on a constant currency basis. Sales of vascular products in the second quarter of 2012 were $180 million, down 2% from the second quarter of 2011 on a constant currency basis. For the third quarter of 2012, we expect cardiovascular product sales to be in the range of $310 million to $330 million. We now expect our full year 2012 cardiovascular product sales to be in the range of $1,335,000,000 to $1,365,000,000. Excluding the impact of terminating the distribution contract in Japan, the midpoint of our 2012 cardiovascular product sales guidance implies 8% constant currency sales growth versus 2011.

Total sales of neuromodulation products in the second quarter of 2012 were $106 million, up 2% from the second quarter of 2011, including $3 million of unfavorable foreign currency translations. On a constant currency basis, neuromodulation product sales increased 5% versus last year's second quarter. For the third quarter of 2012, we expect sales of neuromodulation products to be in the range of $100 million to $110 million, and we continue to expect full year 2012 neuromodulation sales in the range of $425 million to $450 million.

Looking to revenue by geography. In total, 47% of St. Jude Medical sales in the second quarter of 2012 came from the United States, while 53% came from international markets. As with prior quarters, the specific geographic breakdown of St. Jude Medical sales for the second quarter of 2012 is available in our press release.

The gross profit margin this quarter was 74.0%, down approximately 50 basis points from the second quarter of 2011. We continue to expect the full year 2012 gross profit margin to be in the range of 73.5% to 74.0%.

Our second quarter SG&A expenses were 35.0% of net sales, a decrease of 50 basis points from the second quarter of 2011. This reduction in SG&A as a percentage of net sales is a result of a number of cost-savings initiatives, including the integration of the AGA Medical business into our cardiovascular, United States and international divisions and the integration of our neuromodulation domestic sales organization into our United States division. For the full year 2012, we continue to forecast SG&A as a percentage of net sales in the range of 34.5% to 35.0%.

Research and development expenses in the second quarter of 2012 were 12.3% of net sales compared with 12.2% of sales in the second quarter of 2011. For the full year 2012, we expect R&D as a percentage of net sales to be in the range of 12.5% to 13.0% of net sales as we continue funding our portfolio of new growth drivers to accelerate long-term sales growth.

Net other expense was $25 million in the second quarter. And for the third quarter of 2012, we expect the other income and expense line item will be a net expense of approximately $18 million to $23 million. For the full year 2012, we expect other expense of approximately $85 million to $95 million.

For the second quarter, the company's effective income tax rate was 21.3%, which reflects an improvement in the expected tax rate for 2012, driven by acceleration of our international manufacturing initiatives. For 2012, we now expect the tax rate to be in the range of 21.3% to 21.8%.

Moving on to the balance sheet. At the end of the second quarter of 2012, we had $1.2 billion in cash and cash equivalents and $3 billion in total debt and $1.5 billion available under our revolving credit facility with a group of banks.

Next, I want to offer some comments regarding our earnings per share outlook for the third quarter and full year 2012. In preparing our earnings per share guidance, we have assumed that in the third quarter of 2012 and for the full year 2012, the share count used in our fully diluted EPS calculation will be about 316 million to 318 million shares. For the third quarter, the company expects consolidated earnings per share to be in the range of $0.80 to $0.82. And for the full year 2012, we now expect consolidated earnings per share to be in the range of $3.40 to $3.45, which reflects the previously mentioned impact of adjusting our currency assumptions for the remainder of 2012.

I would now like to turn it back to Dan Starks.

Daniel J. Starks

Thank you, John. While we were pleased that all of St. Jude Medical's second quarter results fell within our previously announced guidance ranges, our outlook for the second half of 2012 is more reserved than it was one quarter ago. We attribute this to the weakening of the euro, the risk of slower market growth due to macroeconomic conditions and the impact of ongoing competitive pressures. These realities seem likely to impact our growth over the next 2 quarters covered by our guidance. However, none of these factors change our view that we are on the right track to reach our goal of returning to high single-digit or low double-digit constant currency sales growth on a sustainable basis. I would therefore like to spend the next few minutes reviewing the status of the most important new technologies which support our expectations that we are on track to accelerate our rate of growth.

First, revenue from structural heart products already is growing at a high single-digit rate on a constant currency basis due to the strength of our Trifecta and Epic lines of tissue heart valves. We believe this baseline of high single-digit growth in our structural heart business due to strong tissue heart valve sales is sustainable given that the global market for tissue heart valves already is approximately $1 billion in size, and we have less than a 20% share. Revenue from our tissue heart valve franchise increased approximately 45% during the first half of 2012 on a year-over-year basis. We believe this combination of small share and best-in-class product line positions us to continue delivering strong growth from our tissue heart valve franchise over an extended period of time.

As the growth rate of our tissue heart valve program adjusts later this year to more difficult year-over-year comparisons, we expect to generate new growth with revenue from the first offerings of our Portico line of transcatheter aortic valve replacement or TAVR products. The clinical data for our Portico line of TAVR products continues to meet or exceed expectations and reinforces our confidence that this product line can gain meaningful share once it is released to the market.

Initially, revenue from our Portico line of TAVR products will be modest, with limited market release of one size and one delivery system. However, we expect revenue to grow steadily during 2013 as we continue to launch an expanded offering of sizes and delivery systems. This market already is approximately $800 million in size and may reach $1 billion in size as early as next year.

The next 2 growth drivers I would like to touch on within our structural heart program are our patient -- patent foramen ovale or PFO closure and our left atrial appendage or LAA closure technologies. Today, the PFO and LAA closure markets are in their infancy and together total less than $100 million in annual revenue. These markets are interesting to us, however, because both our PFO closure and our LAA closure products already have leading market shares in Europe, and both technologies are designed to help patients who have an elevated risk of stroke. Given that we currently have a leading share of each market, our priority is to expand these markets to their full potential with strong clinical evidence of improved patient outcomes and favorable health care economics.

Earlier this year, we announced that we completed enrollment in our landmark RESPECT clinical trial, evaluating the benefit of PFO closure in patients who suffer from cryptogenic stroke. As a reminder, the RESPECT trial enrolled 980 patients and generated more than 2,700 patient years of experience. We expect the results of this trial to be presented at a late-breaking clinical trial session during the TCT meeting later this year. In stark contrast to prior randomized trials of competitive PFO devices for mitigation of risk in cryptogenic stroke patients, we are confident our trial will demonstrate greater benefit and less risk in the device arm of the trial.

The clinical trial program we have designed to support the development of the LAA closure market is at an earlier stage than our clinical trial program relating to PFO, but our LAA clinical trial program is similarly robust. We presented positive 6-month follow-up data from our LAA closure post market study in Europe at the recent EuroPCR. We expect to begin enrolling patients within the next few months in our U.S. pivotal trial evaluating the benefit of LAA closure compared with optical -- with optimal medical therapy in patients who have an elevated risk of stroke. We are on track to initiate an additional major randomized clinical trial studying the benefit of our LAA closure technology in Europe within the next few quarters. We are optimistic that over time, PFO closure and LAA closure products for patients who have an elevated risk of stroke have the potential to become a new $1 billion market opportunity as we generate the clinical data needed to demonstrate both favorable patient outcomes and superior health care economics based on the use of these technologies.

To summarize what I've said so far about the role our structural heart program is expected to play in helping St. Jude Medical reach its goal of returning to superior sales growth, we have 4 major growth drivers in our structural heart program, which, taken together, have the realistic potential to generate for St. Jude Medical new annual revenue exceeding $1 billion as these 4 growth drivers continue to evolve. Two of these growth drivers involve large existing markets we are entering as fast followers with next-generation products. Two of these growth drivers involve emerging markets where we already are the market leader and are focused on doing the work required to develop the markets to their full potential. I have not touched at all on our work in the area of percutaneous mitral valve repair or PMVR. And we'll leave that potential new growth driver as additional upside for future discussion, since we do not expect our PMVR technology to impact sales growth in 2013.

Next, I would like to review the emerging growth profile for our program of vascular products. As a starting point, it is important to keep in mind that our reported revenue from vascular products in 2012 absorbs a $47 million loss due to the January 2012 termination of a contract in Japan under which St. Jude Medical distributed vascular products manufactured by a third party. If we adjust for this $47 million loss, core vascular products sales currently are growing at a mid-single-digit rate. We are optimistic that this growth rate can accelerate as early as 2013 due to our pioneering work in 3 major product areas: fractional flow reserve or FFR, optical coherence tomography or OCT and renal denervation.

Starting with our FFR program, we expect the global market for FFR products to exceed $200 million in 2012. St. Jude Medical continues to enjoy a strong leading share of this market based on our pioneer position, our strong pipeline of next-generation products and our sponsorship of multiple landmark clinical trials. Our primary focus, therefore, is on continuing to expand the market. The next major catalyst in our FFR market development program will be presentation of the FAME II clinical trial data at the upcoming European Society of Cardiology meeting later this quarter, followed by publication of the full study results in a major medical journal. We expect these data to be extremely favorable.

A second major catalyst to our FFR revenue growth is an increasing level of customer acceptance for our ILUMIEN product line, which combines both FFR and OCT applications on a single hardware platform. ILUMIEN eliminates the competitive disadvantage we had previously, where we were selling a system with only FFR capability against a competitive system which combined FFR and intravascular imaging capabilities on a single platform.

Turning to OCT. St. Jude Medical is not only the pioneer but has been the only company with OCT technology on the market for approximately 2 full years. We estimate that we already have converted over 15% of the global market for intravascular ultrasound or IVUS to our OCT technology. The resolution of an OCT image is far superior to the resolution of an IVUS image to evaluate stent apposition, in-stent restenosis and risk of vessel dissection. We believe we have a credible opportunity to become the leader in intravascular imaging as we continue to deliver next-generation products and demonstrate the clinical and economic value OCT technology brings to percutaneous catheter intervention or PCI procedures.

The third major growth driver emerging within our vascular business is our renal denervation program. Limited launch of our first-generation EnligHTN renal denervation system already is underway in Europe, 2 quarters ahead of the schedule we announced earlier this year. Our priority in Europe during the next 5 months will be to establish a foundation of key opinion leaders and reference centers for our EnligHTN renal denervation system, prepare for tenders, continue to expand the clinical evidence needed to support long-term development of the market and prepare to launch our second-generation renal denervation technology. We do not expect meaningful revenue from our renal denervation program during the second half of 2012. However, we are laying the appropriate foundation for this technology to help accelerate sales growth in a meaningful way in 2013 and beyond.

To summarize my remarks regarding our vascular business, we expect 3 major growth drivers within this business to help accelerate sales growth in 2013. We believe these 3 growth drivers within our vascular business have the potential to generate at least $1 billion annually in new St. Jude Medical revenue as they continue to develop.

Next, I would like to talk about our Cardiac Rhythm Management or CRM business. As we have indicated previously, growth expectations for our CRM business going forward are modest. We expect 2012 to mark the second year in a row where St. Jude Medical has gained share in a declining CRM market and where St. Jude Medical's revenue, therefore, has declined. We assume that we have not yet seen the bottom of the CRM market, but we are optimistic that we will see the bottom by early 2013.

A stable CRM market will give St. Jude Medical a strong boost toward reaching its goal of delivering high single-digit or low double-digit sales growth on a sustainable basis. This is especially true given that we expect to continue to gain share in the CRM market on an extended basis due to the combination of our replacement market tailwind, our competitive advantage in quadripolar CRT-D systems, our ST segment monitoring technology, our CorVue heart failure monitoring technology, our new Ellipse and Assura ICDs, our Accent MRI line of pacemakers and the overall strength of our CRM product development pipeline.

We need to see the other companies' results before we finalize our ICD market model for the second quarter. But based on our preliminary data, we estimate that we gained approximately 1 to 1.5 points of share in the U.S. ICD market during the second quarter on a year-over-year basis as well as on a sequential quarter basis due to the numerous competitive advantages of our ICD program.

Next, I would like to offer an update on the new growth drivers being developed within our AF division. Investors may recall that our AF division received a warning letter from FDA in April 2009. We are pleased to report that the warning letter FDA issued to our AF division has now been fully remediated and resolved. While that warning letter was pending, the highest priority for our AF division was to remediate all quality system deficiencies as opposed to working on new product development. Resources allocated to new product development already have been expanded as a result of closing out our warning letter. We look forward to bringing numerous ablation catheter products to the United States, which already have been released to the market in Europe. We also look forward to raising the profile for our EP lab of the future, which integrates our MediGuide, EnSite and WorkMate technologies with St. Jude Medical's entire portfolio of products intended for the EP cath lab. Although revenue growth for our AF business was 8% on a constant currency basis during the second quarter of 2012, we continue to expect double-digit growth from our AF business on a year-over-year basis due to a combination of our strong product development pipeline and market growth dynamics.

Turning to neuromodulation. Investors may recall that our neuromodulation division or NMD received a warning letter from FDA in July 2009. Quality system remediation is our highest priority at NMD and is still underway. While that remediation is ongoing, most potential new growth drivers within our neuromodulation business are being delayed. We do not require contribution from new growth drivers in our neuromodulation business to reach our goal of delivering high single-digit or low double-digit sales growth in the near term. Longer term, we are on track to both finish remediating our warning letter and then begin delivering meaningful new growth from our deep brain stimulation or DBS program for multiple indications as well as from our peripheral nerve stimulation program for patients who suffer from treatment-resistant migraines. As one encouraging sign of progress, we are on track to put our Brio line of deep brain stimulators back on the market in Europe before the end of the third quarter.

To summarize my comments from this morning, St. Jude Medical already has the right elements in place to reach our goal of accelerating sales growth to a high single-digit or low double-digit rate on a sustainable basis. Our cardiovascular business alone has 7 major growth drivers, which have the realistic potential to generate over $2 billion in new annual revenue as these growth drivers mature. Our AF business is well positioned to continue growing at a double-digit rate. Our neuromodulation business is strengthening the quality of its manufacturing and product development systems in preparation for returning to a strong growth program, which captures the potential of spinal cord stimulation, peripheral nerve stimulation and deep brain stimulation for a long list of new indications. Our expectations for our Cardiac Rhythm Management business are conservative and realistic and take into account all appropriate competitive pressures and market conditions. We are doing a good job executing on our new growth drivers thus far and are fully focused on continuing to do so.

Having expressed this confidence about our portfolio of new growth drivers, none of this means St. Jude Medical is complacent or satisfied. To the contrary, we continue to be fully committed to reducing costs, increasing our productivity and revisiting all of our business models and assumptions to ensure that we meet the challenges of health care reform, the medical device excise tax scheduled to take effect in January 2013 and the increased expense and unpredictability of regulatory requirements as these continue to evolve. This includes completing the transfer of CRM manufacturing from Sweden to Malaysia before the end of this year, continuing to expand manufacturing operations in Costa Rica and in other cost advantaged locations and leveraging the size of St. Jude Medical to increase the use of shared services and technology across our divisions where it makes sense. This also includes the possibility of leveraging our balance sheet and strong cash flow to repurchase stock or make disciplined acquisitions as appropriate opportunities become available.

With that, I would like to open it up for questions and turn it back to you, Christie, to moderate the questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question is coming from Kristen Stewart with Deutsche Bank.

Kristen M. Stewart - Deutsche Bank AG, Research Division

I was wondering if we can just kind of touch on the CRM expectations. I think your guidance assumes a more moderated view of the CRM market as a whole and then a little bit more of a reduction in your market share that you expect to take for the rest of the year. Can you maybe just give us an update on what you're seeing with kind of the -- particularly the U.S. ICD business and what kind of has prompted your change in guidance?

Daniel J. Starks

Sure. Kristen, this is Dan. The -- during the second quarter, we saw, really across the board, a little bit softer utilization in our CRM business and our AF business and in our CVD business. And this was largely driven by Europe, but it really was an across-the-board effect. And so that's the first thing, is that we're being more reserved in our outlook for the second half of the year, because during the second quarter, we saw signs of softness in most of our major markets. So that's one. Secondly, we didn't really know -- a quarter ago, we indicated that we were not changing the guidance for our CRM business for the year because we didn't think we had enough information to do it but that we fully expected to change our guidance for the year with another quarters of experience. And we partly wanted to look at the other companies' numbers, and we also wanted to get more information about the impact that issue surrounding our Riata high-voltage lead would have on customer use of St. Jude Medical ICD products. So we have another quarters of experience, and that, together with my prior comments, has led us to reduce our outlook on the CRM side. So we previously were talking about a low single-digit decline in the global CRM market. And now we've tweaked that a little bit to say 3% to 4%, which is maybe low to mid-single-digit decline in the CRM market. And about a quarter ago, we were talking about gaining between 0.5 points and 1 point of global share of the CRM market. And now, this quarter, we're reducing that to say that we think that we're on track to gain about 0.5 points of global share of the CRM market. So those are the factors together that -- along with the negative trend in FX translations, that caused us to reduce our outlook here on the CRM side, partly market growth, partly market share, neither factor a major change but both factors together cumulating to our revised guidance. On the high-voltage lead side of things -- and others here around the table can offer more insight than I. But you see from our comments and from our numbers on the U.S. ICD market that although we clearly lost some business during the quarter due to reduced use of our high-voltage lead in the U.S. ICD market, we also -- we gained more new business than that. So it all nets out to what we think is about a 1 point to 1.5 point gain in U.S. ICD market share for the quarter. So there's a lot of moving parts and crosscurrents in our number. But when you net it all out, our ICD business came -- our U.S. ICD business came out of the second quarter in a stronger competitive position based on the results than we showed going into the quarter. So we were under a lot of stress, but we had -- also had a lot of new technology and a lot of very strong service education and training to support the business. And all of that has resulted in the --netted out to the results in the revised guidance we're announcing this morning.

Kristen M. Stewart - Deutsche Bank AG, Research Division

And just as a follow-up on the European, I guess, trends that you're seeing, are those more softness in terms of utilization trends? Or is it softness just in terms of greater pricing pressures?

Daniel J. Starks

It's really both. It's both. So -- but it seems that every day, there is just new volatility in the European -- all the European dynamics. And so our international organization, our European organization, have reported to us that we really haven't experienced this kind of environment before that we're experiencing in Europe today. And it -- the trends are all on the downside, number one, both use and ASPs. And when you add the economic issues, debt crisis issues, austerity issues and political volatility, it just all -- it creates some disruption in the market in the short term. It isn't something that we would want to overstate, but it is something that we're very focused on and that we are taking into account in revising our guidance downward slightly for the second half of this year.

Kristen M. Stewart - Deutsche Bank AG, Research Division

Okay. And just a quick one for John, just on the gross margin guidance. I was surprised that you guys kept that equal in light of the FX reduction. Is that just -- are you seeing greater cost efficiencies with manufacturing and maybe some of the savings from some of these restructuring programs being pulled forward into 2012?

John C. Heinmiller

Well, I think that -- I'm not sure I get the last part of your comment, Kristen, and how that plays into it. But I think with respect to our guidance, we're really holding to the guidance that our gross profit margin for the full year would be in that range of 73.5% to 74.0%. We've taken into account the currency changes that we expect here in the second half. We typically see a little bit of seasonality in the business, which again is factored into our expectations for the second half. We're really right on track with what we're seeing so far in the year, and we're comfortable with that guidance range for gross profit.

Daniel J. Starks

What I'd add, Kristen, I'd add that you're absolutely right that with the change in FX and with the stability of our gross margin expectations, we're really showing some surprising strength in gross margin. And I would attribute that to our ASP discipline. And in part, I would attribute it to the value of our new technology and what that does to ASP support. And I would also attribute it to our discipline and willingness to walk away from especially low-priced business. So on the -- for example, on the pacing side, there's a segment of the pacemaker market that really -- where the business is transacted at a very low ASP level, it doesn't make sense to us. So we -- you see that reflected in the softness of our pacing revenue trends on the one hand, but you see the price discipline reflected in the stability of our gross margin guidance on the other hand.

John C. Heinmiller

I would add -- the other comment I would add to that regarding our initiatives for manufacturing in more tax-advantaged locations, we see the benefit of that starting to come through now with the adjustment to our tax rate, and we’ve really waited until we can validate that we're comfortable with that. And so as we went into the year, we were a little more conservative with our tax rate expectations, but we're now comfortable that, that is a new point for us to take credit for in that tax rate.

Operator

Your next question comes from the line of Mike Weinstein with JPMorgan.

Michael N. Weinstein - JP Morgan Chase & Co, Research Division

First question. John, just to clarify, the $0.04 reduction in guidance for FX, is that the full FX impact? Or were you able to absorb part of it?

John C. Heinmiller

Well, I think it's -- when we look at the impact of adjusting our currency rates for the second half and then we assume that about 50% of that revenue impact flows through to the operating profit line and you make that calculation, that's the $0.04 to $0.05 of negative earnings per share impact that we're absorbing. And so there's a lot of factors going into the current earnings per share expectation, but we're absorbing all of that in our current guidance for earnings per share.

Daniel J. Starks

One way to think about it, Michael, is that the FX impact, you can see that the numbers equate so that one could say that the negative impact of FX on the revenue side and on the EPS line is directly translated into the revision of our guidance. There is significant -- there is material other reduced sales guidance that we are absorbing in our -- that's not -- the reduced sales guidance that is not tied to change in FX that we are absorbing in our FX -- in our EPS guidance. So you can see that we had quite a bit of strength in our prior EPS guidance range.

Michael N. Weinstein - JP Morgan Chase & Co, Research Division

Understood. Dan, let me ask you. The -- if you look at the performance this quarter, everybody's spending 90% of their time talking about the U.S. ICD business. But obviously that, relative to the expectations, is fine. What probably surprises people is that some of the other business lines slowed sequentially in the U.S., whether it's cardiovascular or AF, and you talked about capital equipment or neuromod. Any thoughts on that why the U.S. businesses across the company, x ICDs, appear to slow sequentially?

Daniel J. Starks

Yes. We think it is just -- the good news, Michael, is that the -- we see the impact across the board. So we don't think it's about us and our business and our competitive position. We really think it's a class effect, the fact that we see it across virtually all product lines, all of our major product lines and that we see it not only in the U.S., but we're seeing it in Europe in particular as well, and we see it in some other markets. It just seems like that there was some slowing in our markets, at least in our -- as reflected in our outlook here. And you see it reflected in the second quarter numbers. Typically, you'll see us up at the -- turn in results that are at the high end. Some of our results often will exceed the high end of our guidance range. This quarter, all of our results were well within our guidance range. And so you put the actual results together with the signals that our global organizations are sending back here to headquarters about softness and trends in all major markets. And it looks like that there just is some softening in use and continued strong ASP pressures and just budget and macroeconomic concerns across the board that are finding a way to impact our results and, therefore, also impacting our outlook. It may turn out that we're being too conservative in our outlook for the second half of the year, but that would be fine with us if our results end up coming in stronger than the guidance we've offered this morning.

Michael N. Weinstein - JP Morgan Chase & Co, Research Division

Okay. Last one. Can I just get an update on 2 pipeline items? Dan, you mentioned the PFO closure RESPECT trial. Can you just update us on the filing of that data and that PMA with the FDA? And then second one, through the Portico program, the transapical version, when do you expect to start the CE Mark trial? Have you done that? And -- or if not, when do you expect to start?

Daniel J. Starks

On the PFO closure, the submission to FDA is being prepared as we speak, and there's a lot of data to analyze and prepare and organize. And so I -- I would be confident that the PMA submission will be in during the fourth quarter, and I suspect that we would be unlikely to get that submission in before the end of the third quarter. So timing wise, that's our update. Within that though, one can see that we have a number -- since we -- our organization is strongly focused on preparing that submission, obviously, we're no longer blinded to the data, and that was the basis for level of confidence we've expressed, that when the full trial results are reported at the TCT, we're optimistic that these will be favorable results. On the topic of Portico transapical, I -- you've caught me a little bit unprepared, Michael. I know that that program is fully on track. There has been no slippage in our timeline, but -- and I know I saw a briefing paper on exactly the status of that initiative. And I unfortunately don't recall it, and I don't have it in front of me. So I'll tell you that it's on track, but I'm afraid you've caught me a little bit unprepared.

Operator

Your next question comes from the line of David Roman with Goldman Sachs.

David H. Roman - Goldman Sachs Group Inc., Research Division

Dan, I was hoping you could spend a couple more minutes on your comments regarding the CRM market and your level of confidence in stabilization through the balance of 2012 and I think you said into 2013. If I look back at the past 2 years, I think we've seen a number of sort of fits and starts on the CRM market. And while St. Jude has continued to gain share, the end user market in which you compete seems to have deteriorated, and the rate of recovery, I think, has been slower than some people might have expected. So can you maybe just provide a little bit of perspective on why you think it's going to turn around now and why this time is different?

Daniel J. Starks

Yes. David, first, you're exactly right. And as you and others know, the global CRM market has declined. This will be now the third year in a row for us. It's the second year in a row of decline in our revenue even though we've gained share, but the market itself has declined 3 years in a row. And so as you ask me for confidence and, more or less, a level of proof that the CRM market is near a point of stabilization, I can't give it to you. We have regularly been overly optimistic. So that would be a first just kind of full disclosure. The second thing is that the -- we -- because we have not been able to predict the bottom of the market here on a frequent basis, we're determined to be conservative in our -- in the outlook that we've expressed now. And so the -- our internal modeling, you remember that -- you and others will remember that in the first half of 2011, after the first half of 2011, there was a pretty strong acceleration of decline in the U.S. CRM market. And so we will have anniversary-ed that now here with the second quarter being over. But we still see some modest additional year-over-year decline in the market here in the third quarter, and so we're going to err on the side of being conservative to say that it won't surprise us to see some additional modest decline in the fourth quarter as well. But there's plenty of usage. There are not new negative dynamics affecting the market. The dynamics that have been putting pressure on the market are now -- never say never about a new factor arising, but no new factors have arisen. And so we're -- we think we have identified current factors and done a reasonable job in measuring the impact of these current factors. And all of it, we're factoring in the impact of replacement markets. We're factoring in market mix. We're factoring in the current trends on ASP pressures that we see on a total global basis. And so it's our best guess, and I can't suggest to you that it's more than that. I think what some people might have thought, that in our comments this morning, we would talk about the market bottoming -- having bottomed at the end of the second quarter and maybe hindsight, we'll show that it did. But we're erring on the side of being conservative to say that we don't -- we can't say that we've seen the bottom yet, but we do expect the rate of decline to slow in the second half of this year. And what we'd like to see here in the first half of 2013 is a no-growth market. If we have a no-growth CRM market, we're -- have a lot of reason to think that that'll be a market where our CRM revenue will grow instead of continue to decline on a constant currency basis. And that alone, that's all we need to match up with all of these new growth drivers we have coming to accelerate our sales growth in a meaningful way in 2013.

David H. Roman - Goldman Sachs Group Inc., Research Division

Okay. That's helpful. And maybe just a follow-up on one of the other comments you made in the prepared remarks regarding using your balance sheet either through share repurchases or other maybe external investments. Can you maybe just update us on your latest thought process regarding M&A versus returning cash to shareholders? And you obviously did the AGA deal in the end of 2010 but nothing really significant since then. Maybe just your latest thoughts on how you're thinking about using the balance sheet because I think that’s the first time you've referenced that on a call in a couple of quarters.

Daniel J. Starks

Yes. And so it's a good question, David. My answer won't be crisp, but I will -- but you're right that our comments in our prepared remarks were deliberate and intended to be a signal to people listening carefully. And what that means is that to us, first, we don't have to do any acquisitions. And so the -- you heard our comments repeated a number of times in our prepared remarks that we have the portfolio that we need to achieve our goal of accelerating our sales growth and that there's a lot of basis for that, a well-supported confidence that we have the portfolio we need. But if we can accelerate our sales growth faster, if we can accelerate our sales growth to a higher level with one or more appropriate acquisitions, then we -- part of our strategy is always to maintain our balance sheet in shape so that if the right acquisition opportunity comes along, and at some -- in some years, it's been multiple right acquisition opportunities, we want to be able to take advantage of those opportunities. We want to be in a position where we don't have to do it. We're not pressured into doing a bad deal. But at the same time -- and we like our internal portfolio. But if we can help ourselves with the right acquisition on the right terms, we'll do it. And it wouldn't surprise us to see consolidation of the medical device industry increase during 2013. And what you'll -- for a number of reasons. It's partly because of the macroeconomic pressures. But it's also -- here in the U.S., this medical device excise tax that’s going to take effect in January 2013, we think, will have more impact on businesses than is generally appreciated. That's a cash expense every -- it's paid every 15 days starting in January. We think that, that medical device excise tax, with that new cash outflow every 15 days, will have unintended consequences. It'll -- we think that it will reduce the level of investment that medical device companies have available. We think the reduced level of investment is going to impact jobs and result in reduced jobs. We think that the reduced level of investment and the increased outflow of cash to this excise tax will impact company valuations. There's often the uninformed -- well-intentioned but uninformed comment that the excise tax is intended to offset a windfall from healthcare reform. And it's -- although that may be a good intention, that's clearly not the way the tax is designed. We don't see a windfall from healthcare reform. Our outlook for market growth is lower as a result of healthcare reform for our particular business. And if there was a windfall from healthcare reform, that would be nicely captured in increased profits. And the tax on those increased profits would be nicely captured in normal tax rates on income rather than an excise tax that is completely divorced from cash flow and completely divorced from profit. So we think that this tax really will have a negative impact, a meaningful negative impact on some companies in the medical device space here in 2013. And we want our balance sheet to be in good shape to take advantage of any opportunities that make sense to us.

Operator

Your next question comes from the line of Bob Hopkins with Bank of America Merrill Lynch.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

So just back on CRM for a second. I'm a little bit confused, I guess, because your CRM results were in line with your guidance and probably a little bit better than what a lot of people in the Street were looking for. But the tone of your conversation around CRM is definitely more subdued. So I'm just kind of curious as to what's driving the negative comments if your results were so in line. Is this just adding up the numbers for Boston and Medtronic in Q1? Or -- and could this just be that your share momentum is perhaps a little less than you think and that the market is actually a little healthier? I just want to try to understand the disconnect between your solid numbers relative to expectations and your more subdued tone on the market.

Daniel J. Starks

Sure, Bob. Well, the -- what we really need to better inform the discussion is a little more data, and we do need to see the other companies' reported results. So I think our conversation will really get simplified once we see the other companies' results. And so that's more meaningful than anything else. We'll see one company's results here within the next 2 weeks and the other company's within the next several weeks, a month or so out. And so it's probably not worth a lot of agonizing between here and there working too hard to guess the answer when we're going to have the answer pretty quick. That's point one. Point two is that in our CRM business, the numbers that were most meaningful, that were spot on and that were strong were our U.S. ICD numbers. And so -- but the other numbers in the CRM business were relatively soft. So the international numbers were softer than what we expected at the -- going into the quarter, and that ties back to my comments about macroeconomic conditions in -- particularly in Europe but not limited to Europe. And then on the U.S. pacing side, we -- our U.S. pacing number is down 9% on a year-over-year basis. And so we would call that a relatively soft number. And so we're seeing softness in the market, even though it -- that softness is offset by the single point of our CRM business that tends to draw the most attention, which is the U.S. ICD part. So the U.S. ICD business, if the rest of the CRM business came in the way our U.S. ICD business came in, you would hear more bullish expectations from us for the second half of the year. But we think that we're a little bit cautious, and in our prepared remarks, we said this is preliminary data, and we need to see the other companies' results. Everything we see tells us that the market itself is a little bit softer, even though our competitive position inside it remains very robust.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

So just to follow up on that. You mentioned that you thought pricing was a little weaker. Can you give us a sense as to magnitude, either for CRM as a whole or pacemakers or ICDs, whatever you have on price? I'd just be curious as to -- if you could help quantify the pricing softness that you're seeing on the marketplace in Q2 versus, say, Q1 or Q4.

Daniel J. Starks

Sure. The best way to think about it is that in our -- that I think we saw more pricing pressure on the low-voltage side or the pacemaker side than elsewhere. And we've got some competitors with pretty old product lines and with -- that are competing on the basis of price. And I -- the way that we think about that is that there is a tier of the pacing market where the business is transacted at very low ASPs. And that's not -- that does not fit our business model. That's not the business we're going after, a business based on price at very low ASPs. So it isn't so much that our ASPs -- that our own ASPs were meaningfully different in the second quarter once you take into account the -- all the factors you'd use to get apples-to-apples once you take into account changes in FX, changes in replacement as a percent of mix, changes in geographic mix, all that kind of stuff. Our own ASPs were not so different on a trend basis than in past quarters. But there was business that we walked away from that is reflected in our year-over-year decline of pacing revenue that other companies went after. And it made sense to them, but it didn't make sense to us.

Robert A. Hopkins - BofA Merrill Lynch, Research Division

And then lastly, real quickly, on neuromodulation. Can you just give us a sense as to what products have been delayed as a result of the FDA situation and kind of rough timeline for resolution?

Daniel J. Starks

Yes. Rough timeline, I'm going to be -- I just don't want to opine. Maybe you can drag out of me that it's -- we're looking at 2013 rather than 2012. But I mean there's more work to do. And once all the work is completed, there's process to go through before everything is resolved. But the timeline would be unpredictable, and I would not be in a position to offer any formal guidance or expectation on timeline. But with respect to products, so while we're working on remediation and emphasizing to ourselves as well as emphasizing to everybody else appropriate that this is our top priority and there's nothing that's going to be subordinated to it, it's really -- every product that one might see here as a new product coming out, virtually every product and, certainly, every FDA submission. So our DBS submission for Parkinson's, although the trial is done, that program is delayed. Our migraine submission, although the clinical trial work is completed, that program here in the U.S. is delayed. We're not -- we haven't made a submission in either of those 2 respects. And so those would be the 2 main programs I'd refer to.

Operator

Your next question comes from the line of David Lewis with Morgan Stanley.

David R. Lewis - Morgan Stanley, Research Division

Dan, I think big investors obviously believe that the non-CRM businesses will drive more sustainable value for St. Jude's sort of going forward. So I wonder if you could just give us a little bit more visibility about the pressures in the quarter. Specifically, if you just look at the total business, do you think there were more sort of nonspecific pressures in the U.S. or more nonspecific pressures o U.S.? And I think investors may have a perception that given the intense focus there's been on CRM as a corporation that maybe you took the eye off the ball in some of the non-CRM products, or there's sort of a spillover in terms of sales force direction in non-CRM versus CRM. Can you sort of just talk to those things and whether there's any truth to those or they're sort of categorically false?

Daniel J. Starks

Sure. The -- on weakness, first, in markets and your question about U.S. versus OUS, I think we're more focused on the unpredictability and negative trends in Europe in particular on a macroeconomic basis than we are in other markets. But having said that, we see yellow flags, not red flags. But we see yellow flags in the U.S., and we see some yellow flags in China and other markets where the robustness just is not quite as solid here with the signals we -- that are coming back to us here in headquarters during the second quarter as in prior quarters. But the big issue is -- for us is Europe. On the topic of did distraction or did the level of attention, the level of priority on U.S. ICD -- our U.S. ICD business spill over into some negative impact in our other product lines, it's an interesting question. It's a good question. And my data may be a little bit soft, but I think the answer is no. And there may be some exceptions to that, that someone could bring to my attention. But generally speaking, we have -- particularly, what I would especially point to would be our CVD business. So in our cardiovascular business, structural heart and vascular, we have completely dedicated field organizations to those product lines. And we -- and even -- and those product lines are growing at reasonable levels. It's a little bit hard to decipher with some of the non-apple-to-apple factors, like the termination of a distribution contract worth $47 million in revenue in 2011 that especially colors the vascular business. But we -- our market share position is good. We're continuing to gain share. We're converting business. We have strong clinical trial programs. And the CVD business was -- rather than being up at the high end of our guidance range, it was down in the lower half of our guidance range. So it seems like there's -- there are factors that are really not related to our focus or our competitive position that impacted our business in the second quarter. It's always hard to really define that, and the data is never crisp. But we're doing the best we can, and we're being as transparent as possible and telling you we're not sure, but this is what we think. And it looks to us like it's more of a macroeconomic impact than it is anything within our own particular focus and execution.

David R. Lewis - Morgan Stanley, Research Division

Yes. It's very clear. And then maybe just one quick one. St. Jude's always been able to offset pressures in the top line and prevent them from hitting the bottom line. And again, this quarter, you basically did the same thing. So as you think about MedTech tax next year, the pressures in your business, but you also think about where more Puerto Rico, Malaysia, Costa Rica, the buyback are, your confidence and ability to continue to drive that bottom line and preserve the bottom line in this environment based on some of the tailwinds you have going for you, do you feel that your conviction there is where it was the beginning the year? Is it a little stronger? Or is it a little softer?

Daniel J. Starks

Well, I know what the right answer is, David. I'm just hesitating a little bit because we haven't given guidance for 2013, and so we haven't really said what the baseline expectation for 2013 was at the beginning of the year, much less know how we are looking at it here. And I don't want anybody to kind of misinterpret my comments and get an expectation for 2013 earnings leverage that really we're not prepared to give. And it would be so easy for people to hear the same words and take it as meaning different things, and I just don't want to be responsible for anybody misunderstanding the expectations for 2013. So I think the better thing for me to do is to not answer your question and say that we aren't prepared to give our guidance yet for 2013. The -- on the impact, order of magnitude of the medical device excise tax for St. Jude Medical, it's less for us than it is for some others. There are some companies that have 70% of their revenue mix is based on U.S. sales. For us here this quarter, it was only 47% of our revenue mix that’s based on U.S. sales. So that's one factor. Second factor is the -- if you look at our guidance for full year U.S. sales and take a midpoint and multiply it times 2.3% excise tax, that gives you an order of magnitude somewhere in the ballpark of $60 million of new excise tax expense for us. And when we create our 2013 operating plan, we're going to -- we're just getting started in that process, and we're going to have to decide how much of that tax we're going to cover and how much of that tax we're going to let flow through to impact EPS with the idea that longer term, we're better off kind of resetting EPS growth at a new level, taking into account the impact of the excise tax but really maintain a very high level of investment and new growth drivers with the idea that there might be a little bit of sticker shock on EPS impact of excise tax in the initial guidance for 2013. But as people get reset expectations and then see the progress we make on new growth drivers and the acceleration of top line and then the continued leverage of that to the EPS, all of that will work out pretty good. So we've got some tough decisions to make in our operating plan, and we really haven't made those decisions yet. So I'd say it's not really a question of confidence. It's more a question of just what decisions are we going to make here in finalizing our operating plan.

Operator

Your final question will come from Matthew Taylor with Barclays.

Matthew Taylor - Barclays Capital, Research Division

Just wanted to delve into some of the performance in the U.S. in CRM given the focus there. I mean, certainly, your results held up better than I think a lot of folks were expecting. Can you talk to some of the counter-detailing you're doing to counteract some of the negative perceptions around Durata in the market? And just comment on what you're seeing in terms of some of those metrics you look at to make sure that your ICD business is healthy. And any comments around Quadra would be appreciated.

Daniel J. Starks

Matthew, let me refer your question to President of our CRM business, Eric Fain, and ask you, Eric, if you can offer any color commentary on impact of high-voltage lead discussions and issues and data.

Eric S. Fain

Sure. So I don't think there's been that much of a change. I mean, our approach has really been to get our customers the appropriate information and really go with the factual data. And so as we talk to customers, as we get a chance to really go through the design differences between Durata and Riata and then show people the actual performance data, including our strong registry performance, and as time goes on and we continue to do that, in general, customers come away with more confidence in our Durata leads. And we're seeing that, and it's just an ongoing basis. As we come out of HRS, at HRS and coming out of HRS, there was certainly a lot of discussion about that as we moved through a few weeks later to Cardiostim and was again in front of a lot of customers, I'd say that the level of noise decreased, even in spite of that mod report that later was shown to not be an issue of concern with design at all for Durata. And we continue to do that. I think the results that we just put out on our Riata lead evaluation study provides us again with a good opportunity to present the facts to customers and that, that data also is supportive of the design changes and the impact, the positive impact, the design changes in our 7 French lead program even before getting to the addition of Optim insulation. So all of that, I think, is just an ongoing basis and as we continue to inform people and make sure that people really have the factual information and the data, that, that's helping us. On Quad, as Dan mentioned, based on our preliminary data, we think we took about 1 point to 1.5 points of overall high voltage market share in the U.S., and that certainly was driven on the strength of our Quadpole launch and adoption. We saw continued good adoption throughout the quarter. We're seeing the mix of our CRT-D device sales to continue to increase with Quad, and we're getting the ASP premium there because people in hospitals are seeing the value of that technology. And I think we're also benefiting now on an ongoing basis, where in the past, especially in the U.S., we've talked about the number of publications, the peer review publications that are out there, and that continues to increase. But now that customers are getting to experience the technology themselves and really seeing the benefits to their own practice and their own patients, that also is having a very good reinforcing effect.

Matthew Taylor - Barclays Capital, Research Division

And just to the extent you are seeing some caution around it, I mean, what do you think it takes for some of those physicians to come back? I mean, is it just continued work with your programs and updates on your registries through time? Is there a certain timeframe that you're thinking about for some of these doctors? Is there a magic number? Or is it just continued uptakes?

Eric S. Fain

I think it’s -- I mean, it's continued uptakes now, so I think that you have to think about the different buckets of customers. I mean, there are customers who weren't St. Jude Medical high-voltage lead users to begin with. And so obviously, to convert them is just an ongoing market share marketing effort. But for the customers that have used our leads, I think that again, it's getting people the information, and time is helping. And as more data comes out, people get more comfortable, and I think there's no magic line to draw.

Daniel J. Starks

And so that concludes our call this morning. I'll turn it back to you, Christie, for your concluding remarks.

Operator

Today's call is being recorded and will be available for replay beginning at 12:00 p.m. Eastern Standard Time. The dial-in numbers are (855) 859-2056 and (404) 537-3406. And enter pin number 95945344. Thank you. This does conclude today's teleconference. Please disconnect your lines at this time.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: St. Jude Medical Management Discusses Q2 2012 Results - Earnings Call Transcript
This Transcript
All Transcripts