Medtronic Earns 79 Cents Per Share, Reiterates Full-Year Guidance

Medtronic ($MDT) just reported fiscal first-quarter earnings of 79 cents per share which matched Wall Street’s estimate. The best news is that the company reiterated its full-year earnings guidance of $3.43 to $3.50 per share.

That’s good to see because the stock has fallen and the company doesn’t see any major changes in their business outlook for the coming year. Taking the mid-point of that guidance, Medtronic is going for just nine times earnings.

Analysts surveyed by FactSet expected, on average, earnings of 79 cents per share on revenue of $3.98 billion. Analysts typically exclude one-time items from their estimates.

Medtronic has struggled to maintain earnings growth amid sluggish sales of its two leading products: heart defibrillators and spinal implants. Sales for implantable cardioverter defibrillators, or ICDs, fell 8 percent on a constant currency basis to $697 million, as procedure volumes fell in the United States. ICDs treat rapid heartbeats.

Sales from the company’s spinal business fell to $825 million from $829 million, even though international sales in that segment grew 7 percent. That business took a big publicity blow earlier this year when a medical journal alleged that Medtronic downplayed the risks of its InFuse spinal repair protein and failed to disclose millions of dollars in payments to the authors who wrote the initial studies of the product.

Medtronic’s total costs and expenses also climbed 11 percent to $3.03 billion.

The company said international sales accounted for 46 percent of its revenue, and emerging markets sales grew 30 percent as reported or 25 percent on a constant currency basis to $408 million.

Medtronic reaffirmed the fiscal 2012 forecast it made in May. The company expects earnings of $3.43 to $3.50 per share on revenue growth of 1 to 3 percent, or to $16.1 billion to $16.41 billion.

Analysts expect, on average, $3.46 per share on revenue of $16.57 billion.

Here’s a look at Medtronic’s quarterly results for the past several years:

Quarter EPS Sales in Millions
Jul-01 $0.28 $1,456
Oct-01 $0.29 $1,571
Jan-02 $0.30 $1,592
Apr-02 $0.34 $1,792
Jul-02 $0.32 $1,714
Oct-02 $0.34 $1,891
Jan-03 $0.35 $1,913
Apr-03 $0.40 $2,148
Jul-03 $0.37 $2,064
Oct-03 $0.39 $2,164
Jan-04 $0.40 $2,194
Apr-04 $0.48 $2,665
Jul-04 $0.43 $2,346
Oct-04 $0.44 $2,400
Jan-05 $0.46 $2,531
Apr-05 $0.53 $2,778
Jul-05 $0.50 $2,690
Oct-05 $0.54 $2,765
Jan-06 $0.55 $2,770
Apr-06 $0.62 $3,067
Jul-06 $0.55 $2,897
Oct-06 $0.59 $3,075
Jan-07 $0.61 $3,048
Apr-07 $0.66 $3,280
Jul-07 $0.62 $3,127
Oct-07 $0.58 $3,124
Jan-08 $0.63 $3,405
Apr-08 $0.78 $3,860
Jul-08 $0.72 $3,706
Oct-08 $0.67 $3,570
Jan-09 $0.71 $3,494
Apr-09 $0.78 $3,830
Jul-09 $0.79 $3,933
Oct-09 $0.77 $3,838
Jan-10 $0.77 $3,851
Apr-10 $0.90 $4,196
Jul-10 $0.80 $3,773
Oct-10 $0.82 $3,903
Jan-11 $0.86 $3,961
Apr-11 $0.90 $4,295
Jul-11 $0.79 $4,049

Check out Medtronic’s EPS trend. This is what I like to see: a clean strong upward line. The red is based on the company’s forecast. As you can see, MDT is still very profitable, but the earnings will be flat for a time.

Posted by on August 23rd, 2011 at 9:03 am


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