Good start to quarter fans optimism about medtech

By Debra Sherman

CHICAGO (Reuters) - Surprisingly good quarterly results from St. Jude Medical (STJ.N) and the medical device units of Abbott Laboratories (ABT.N) and Johnson & Johnson (JNJ.N) are giving investors hope for strong results from other medical technology companies.

The S&P Health Care Equipment Index .GSPMED was 1.76 percent higher at 604.31 in afternoon trading after establishing a record at 607.24.

"Medtech is a defensive sector and valuations look good here," said Jeff Jonas, a portfolio manager at Gabelli Health and Wellness Trust Mutual Fund.

St. Jude Medical, one of the three manufacturers of implantable heart devices that correct irregular heart beats, posted better-than-expected quarterly earnings of $208.5 million, or 60 cents per share, beating Wall Street's estimates by 5 cents. It also raised its forecast for the full year.

St. Jude posted strong results across all of its businesses, led by a 24 percent increase in sales of its implantable cardioverter defibrillators, better known as ICDs, devices that regulate a dangerously rapid heartbeat.

Bullish comments from St. Jude executives about the health of its markets prompted investors to buy shares in competitors Medtronic (MDT.N) and Boston Scientific (BSX.N), sending their stock higher.

TOPPED FORECASTS

Abbott Labs, a maker of pharmaceuticals, nutritional supplements and medical devices, also topped analysts' forecasts. It reported second-quarter earnings of $1.32 billion, or 85 cents per share, driven in part by strong sales of its medical products, which jumped 15 percent. Within the device group, sales of heart stents were up 24 percent and sales of diabetes care products were up 12 percent.