Medtronic Earns 85 Cents Per Share

Not much of a surprise from Medtronic ($MDT) this morning. The company reported fiscal Q1 earnings of 85 cents per share which matched Wall Street’s forecast. I was expecting a little more but I’m not at all disappointed by these results. Revenues were up 1.6% to $4.01 billion..

The world’s biggest medical device maker said sales of coronary and vascular devices and structural heart products all improved. Medtronic said revenue from implantable devices like pacemakers and defibrillators decreased, although it said U.S. sales of implantable defibrillators are holding steady.

Bone graft revenue decreased in the wake of safety concerns and a shareholder lawsuit, and revenue from diabetes and surgical technology and other devices increased.

The earnings-per-share figure got a boost thanks to 3% fewer shares outstanding.

Medtronic said revenue from coronary products increased 11 percent to $433 million. Sales of structural heart devices like artificial valves rose 2 percent to $280 million and endovascular revenue, which includes stents, increased 12 percent to $209 million.

Revenue from the company’s restorative therapy business, which makes surgical devices and products used to treat diabetes, nerve disorders, and other conditions rose 3 percent to $1.89 billion. Medtronic said most of its businesses reported better sales than a year ago, but sales of its Infuse bone graft shrank 19 percent to $141 million during the quarter.

In 2011, a medical journal said Medtronic understated the risks of Infuse and did not disclose payments to the authors of studies on the product. In March 2012, Medtronic agreed to pay $85 million to resolve a federal lawsuit brought by shareholders. The U.S. government closed an investigation into Infuse in May. The product contains a genetically engineered protein that can stimulate bone growth. It is approved for use in spinal, oral and dental graft procedures, and it was frequently used in neck surgeries and other procedures.

The most important news is that Medtronic is reaffirming its full-year earnings forecast of $3.62 to $3.70 per share. Earlier today, the shares got to a new 52-week high.

Posted by on August 21st, 2012 at 11:36 am


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