Medtronic’s Earnings

Medtronic (MDT) will release its earnings after the close today. The earnings are still humming along even though the stock hasn’t done much. Here’s a look at MDT’s stock (blue line, left scale) and earnings-per-share (gold line, right scale).

Here’s the earnings preview from Medtronic:

Medical device maker Medtronic Inc. reports earnings for the fiscal 2008 first-quarter on Tuesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Concerns about lagging sales of its implantable heart devices followed the company into the quarter as Chief Executive Arthur Collins moved closer to his August retirement date.
In June, the company received Food and Drug Administration approval for an implantable pain reliever, aimed at treating chronic lower back pain. It also raised its quarterly dividend 14 percent to 12.5 cents per share and elected two independent board members, raising the total number of board members to 14.
In July, the company said its drug-coated stent Endeavor showed positive results in a late-stage study comparing it with rival Boston Scientific’s Taxus. Also in July, the company was issued a warning letter from the FDA saying the company did not properly report problems with some of its medical devices. The problems stem from the company’s Minneapolis plant where drug infusion pumps are made. The FDA noted that the company had already fixed the problems, but had failed to report them within the required 30-day period.
During the quarter the FDA also approved Medtronic’s Prestige Cervical Disk System, which the company said is an alternative to surgery for people suffering from degenerative disc disease. Medtronic also said it would buy Kyphon, a spinal implant maker, for $3.9 billion.
BY THE NUMBERS: Analysts surveyed by Thomson Financial expect profit of 62 cents per share for the quarter on revenue of just under $3.17 billion. During the first quarter of fiscal 2007, the company earned 51 cents per share on revenue of $2.9 billion. In May, Medtronic said it would no longer provide guidance more than a year ahead and would stop providing quarterly guidance.
ANALYST TAKE: Leerink Swann & Co. analyst Jason Wittes said he expects the company to meet Wall Street expectations. Sales of implantable cardiac devices are expected to rise 9 percent to $732 million, with a large surge in sales figures from outside the U.S., he said.
BMO Capital Markets analyst Joanne Wuensch also said she expects first-quarter results to meet Wall Street expectations and said implantable cardiac device sales will be a key focus.
WHAT’S AHEAD: Wall Street and the company are waiting for the FDA’s decision on Endeavor. The company previously said it expects approval by the end of the year. Analysts are also waiting for more information on the Kyphon buyout, for which there is no set closing date.
STOCK PERFORMANCE: Medtronic shares fell 5 percent during the first quarter to close at $50.81 on July 27. The company’s fiscal year ends April 27.

Posted by Eddy Elfenbein on August 21st, 2007 at 12:19 pm

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