St. Jude Medical believes hospitals are being more conservative with their inventories of certain medical devices, and that led to lower-than-expected sales in recent months.
The company today reported preliminary results for the third quarter. Net sales totaled about $1.16 billion for the three-month period, which ended Oct. 3. That’s a 7 percent increase over last year but less than what was expected.
“We believe that macro economic factors coupled with the continued pressures surrounding healthcare reform resulted in changes in purchasing behavior among some of our hospital customers,” CEO Dan Starks said in the company’s press release.
Another factor that will take a chunk out of profits: upward of $50 million in one-time costs associated with severance costs for its recent workforce reductions.