Medtronic 2Q Profit Rises On Favorable Comparison
WASHINGTON (AP) — Medtronic Inc., the world’s largest medical device maker, reported higher-than-expected earnings Tuesday as overall sales edged up despite continuing pressure on the company’s 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. Tighter hospital budgets, reduced procedures and safety concerns have led doctors to implant fewer devices.
But the Minneapolis-based company said revenue rose 3 percent in its second fiscal quarter to $4.13 billion, helped by sales of heart valves, stents and other products.
For the most recent quarter, the company reported net income of $871 million, or 82 cents per share, compared with $566 million, or 52 cents per share, in the same quarter last year. That period was 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.
Its shares rose $1.33, or 4 percent, to $34.60 in premarket trading.
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.
Revenue from the company’s spine business fell 3 percent to $839 million. In June that business took a major publicity blow after a medical journal alleged that the company downplayed the risks of its InFuse spinal repair protein. The implant, which is approved to treat degenerative spinal disk disease, had sales of approximately $800 million in the last fiscal year. But Medtronic said Tuesday sales declined 16 percent in the last quarter.
Medtronic said sales of diabetes treatments and surgical tools helped offset weak spinal sales.
International sales rose 6 percent to $1.83 billion, accounting for 44 percent of total sales for the quarter.
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