Medtronic, Inc. : Medtronic 1st-Quarter Profit Rises 5.2% Despite Softness in Key Markets
08/21/2012| 08:05am US/Eastern
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By Tess Stynes
Medtronic Inc.'s (MDT) fiscal first-quarter earnings rose 5.2% as revenue edged up, though the medical-device maker continued to face challenges in key heart and spinal device markets.
The broader market for expensive heart-rhythm devices has long been under pressure from factors like high unemployment, government scrutiny of implant practices, austerity measures in Europe and general economic turmoil.
Medtronic has been battling sluggish sales in its heart rhythm and spine segments, though it has seen signs of stabilization. In the latest period, revenue from implantable cardioverter defibrillators was flat excluding currency impacts, while spinal revenue was down by 3% on that basis.
In the U.S., defibrillators sales were down 2.9% from a year earlier.
For the quarter ended July 27, Medtronic reported a profit of $864 million, or 83 cents a share, up from $821 million, or 77 cents a share, a year earlier. Excluding convertible-debt and acquisition-related impacts, earnings were up at 85 cents from 79 cents.
Revenue increased 1.6% to $4.01 billion, or 5% excluding currency fluctuations.
Analysts polled by Thomson Reuters most recently projected earnings of 85 cents on revenue of $4 billion.
Gross margin fell to 75.7% from 75.9%.
Shares of Medtronic, which affirmed its guidance for the fiscal year, closed Monday at $41.45 and were inactive premarket. The stock is up by 32% in the past year.
Write to Tess Stynes at tess.stynes@dowjones.com
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