Medtronic net falls on charges, but ICDs improve
Written on February 19, 2008
Medical device maker Medtronic Inc (MDT.N: Quote, Profile, Research) on Tuesday reported sharply lower net earnings on charges related to the acquisition of spinal products company Kyphon Inc.
But fiscal third-quarter earnings excluding charges exceeded Wall Street expectations, and the company said it would not be surprised if the consensus estimate for full-year earnings rose, as sales of its implantable cardioverter defibrillators (ICDs) to treat rapid heart rhythms recovered following a component recall.
Medtronic in October had halted sales of its Sprint Fidelis line of leads, or wires that link the heart to an ICD, after finding that the components may have contributed to five patient deaths. The company increased production of an alternative lead to sell with its ICDs.
“After the first month we were able to pretty much pick up the pieces and resume to where we were before this whole situation occurred,” Medtronic Chief Executive Bill Hawkins said in an interview.
Medtronic said net earnings in the fiscal third quarter ended January 25 were $77 million, or 7 cents a share, compared with $710 million, or 61 cents a share, a year earlier.
Excluding 56 cents of special charges mostly for the Kyphon purchase, Medtronic said it earned 63 cents a share fast payday loans. On that basis, analysts’ average forecast was 61 cents a share, according to Reuters Estimates.
Third-quarter revenue rose 12 percent to about $3.41 billion from a year ago, and sales of ICDs increased 2 percent to $726 million.
Medtronic is the largest maker of ICDs, with about half of the market for the life-saving devices that can shock a racing heartbeat back to normal rhythm.
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