Heart Devices Pace Medtronic
Updated from 5:41 p.m. EST
Medical-device maker Medtronic (MDT) said its fiscal second-quarter revenue reached nearly $2.8 billion as the company benefited from double-digit sales growth in its largest segments, including a big gain for its heart instruments.
The Minneapolis-based company said its top line rose 15% from $2.4 billion in the prior year's second quarter. Medtronic earned $816.5 million, or 67 cents a share, up from $535.7 million and 44 cents a share last year.
Before items, second-quarter earnings would have been $657.1 million, or 54 cents a share, matching Wall Street's consensus per-share estimate.Medtronic's cardiac rhythm management business posted sales of nearly $1.3 billion, up 17%. Implantable cardioverter defibrillator revenue rose 34% to $733 million. According to the company's estimates, more than half of the ICDs being implanted are Medtronic's. In a conference call after the market closed Wednesday, Medtronic said it continues to think many patients who could be helped by ICDs aren't receiving the devices, meaning the market has substantial room for growth. The company's business focused on spinal, ear nose and throat, and navigation devices saw its revenue reach $603 million, up 19% from a year ago. Second-quarter sales at the neurological and diabetes segment climbed 13% to $487 million, and vascular revenue increased 12% to $225 million. However, revenue from Medtronic's emergency response systems business fell 21% because of vendor supply issues. That segment brought in $81 million in the quarter. Medtronic's Chief Financial Officer Gary Ellis reiterated the company's earnings guidance of $2.18 to $2.23 for its 2006 fiscal year, which it first issued at its October investor meeting. The company had previously forecast a profit of $2.10 to $2.15 for the year. Also during the conference call, Medtronic provided an update on trials of the obesity device it gained through buying Transneuronix, saying it hopes to have data by the end of 2005 and to file an application for its approval early next year. Medtronic shares were down 99 cents, or 1.7%, to $56 in after-hours trading.
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