Medtronic Earns 88 Cents Per Share

Medtronic ($MDT) said today that it earned 88 cents per share for its fiscal second quarter. That was right inline with expectations. As I said in the last CWS Market Review, Medtronic usually comes very close to expectations.

The most important news is that Medtronic reiterated its full-year guidance for earnings to range between $3.63 and $3.70 per share. Overall, the numbers beneath the numbers were pretty good. Unfortunately, Medtronic has been hurt by the slower economy in Europe and Asia.

Quarterly revenue increased 2 percent to $4.095 billion.

Yet revenue from its two biggest businesses, heart rhythm management and spine, was flat to lower.

The bright spot in the quarter was provided by indications that these two markets – which together make up about half of its total revenue – were stabilizing, said Chief Executive Omar Ishrak in a telephone interview.

“Signs of stabilization in (cardiac rhythm management) and spine have been encouraging. In those markets, we have gained share,” he said.

Cardiac Rhythm Disease Management revenue, which includes sales of pacemakers and defibrillators, was flat at $1.23 billion, excluding the impact of foreign currency, or down 3 percent including the currency impact.

Sales of implantable heart defibrillators were the highest they have been in 10 quarters and sales of leads rebounded to levels not seen since the company recalled its Fidelis lead 5 years ago.

Spine revenue was $782 million in the quarter, 5 percent lower excluding foreign currency translations, or down 7 percent including the currency impact.

Ishrak said his biggest disappointment in the quarter was China’s results.
“Chinese growth was 11 percent.. That could have been better,” he said.

The shares are reacting well today; at one point MDT nearly broke above $43. This may reverse the trend of the past few weeks. In early October, MDT was as high as $44.79 and it got as low as $40.44 a few days ago.

Posted by on November 20th, 2012 at 1:41 pm

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