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Medtronic beats estimates on higher 2Q sales
MATTHEW PERRONE
(The Associated Press)



05:16:33PM (ET) Tuesday,November 22,2011.

WASHINGTON (AP) — Medtronic Inc., the world's largest medical device maker, reported higher-than-expected earnings Tuesday as sales of newer devices helped make up for an ongoing slump in its best-selling heart and spine implants.

For more than a year Medtronic has reported weaker sales of its two leading franchises, heart defibrillators and spinal implants, which account for about 40 percent of total sales. Tighter hospital budgets, reduced procedures and safety concerns have led doctors to implant fewer devices. Those trends continued in the most recent period, with combined sales of the devices falling 5 percent.

But overall revenue rose 3 percent in the second fiscal quarter to $4.13 billion, helped by sales of heart valves, stents and other upgraded products, the Minneapolis-based company reported.

"I was pleased to see the strong performances in many of our businesses, as our new products are taking share and protecting pricing," said Chief Executive Omar Ishrak. Those products include the company's Revo pacemaker, the first device of its kind that can be used with an MRI scanner, and the Resolute drug-eluting stent, a next-generation device used to prop open arteries.

For the most recent quarter, the company reported net income of $871 million, or 82 cents per share, up 54 percent from $566 million, or 52 cents per share, a year ago. Results in the year-ago period were weighed down by a massive legal settlement related to defective heart defibrillators.

Excluding one-time expenses, the company would have earned $898 million, or 84 cents per share, in the most recent period.

Those results topped analyst expectations for earnings of 82 cents per share on revenue of $4.07 billion. Analysts had speculated Medtronic might scale back its full-year revenue guidance, but the company said it still expects earnings of between $3.43 and $3.50 per share for fiscal 2012.

Medtronic shares rose $1.45, or 4.4 percent, to $34.72 in afternoon trading. They have moved haltingly higher since dipping to a 52-week low of $30.18 in early August. Their high for the past year was $43.33 in mid-May.

Revenue in Medtronic's portfolio of cardiovascular devices increased 1 percent to $2.21 billion, with sales of pacemakers and heart valves making up for weaker sales of implantable heart defibrillators. Revenue from those heart-zapping devices, used to treat heart failure, fell 8 percent to $708 million. Medtronic and other device makers have seen profits drop since the Department of Justice began investigating alleged overuse of defibrillators in January.

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I'm sure Medtronic will keep up "the pace".

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