Medtronic Q1 Earnings Climb, 2011 Guidance Falls
August 24th, 2010 at 10:17 am Posted by
Source: The Associated Press, August 24, 2010 8:10 AM EST
INDIANAPOLIS (AP) — Medtronic Inc. said Tuesday its fiscal first-quarter earnings jumped to $830 million, but revenue fell in a soft global market, and the medical device maker lowered its 2011 earnings expectations.
The Minneapolis company said it earned 76 cents per share in the three months that ended July 30. That compares to net income of $445 million, or 40 cents per share, last year, when restructuring charges and legal fees weighed down performance.
Revenue fell 4 percent to $3.77 billion due in part to an unfavorable foreign currency impact and a $200-million benefit from an extra week in the same quarter last year.
Excluding one-time costs, the company earned 80 cents per share.
Analysts polled by Thomson Reuters expected, on average, earnings of 80 cents per share on $3.94 billion in revenue. Analysts typically exclude one-time items from their estimates.
“A softer global healthcare market impacted by decreased utilization and increased pricing pressure made for a difficult first quarter,” Chairman and CEO Bill Hawkins said in a statement from the company.
The world’s largest medical-device company said global sales for its Cardiac and Vascular Group fell 5 percent to $2.03 billion in the quarter. Those sales actually increased 1 percent when adjusted for foreign currency and the extra week last year.
Spinal revenue dropped 9 percent to $829 million due to growing pricing pressures and weaker procedure growth, the company said.
Spinal devices make up Medtronic’s second-largest franchise. Medtronic spent nearly $4 billion to acquire spinal implant maker Kyphon in 2007, though many analysts say the unit is not living up to expectations.
The company said it now expects fiscal 2011 earnings per share to range between $3.40 and $3.48, with revenue growing between 2 percent and 5 percent on a constant currency basis.
In June, Medtronic expected fiscal 2011 earnings of between $3.45 and $3.55 per share with revenue growth ranging between 5 percent and 8 percent.
In premarket trading, Medtronic shares slid 4 percent to $33.58 from Monday’s close of $34.99.
