Medtronic Net Falls 38% on Charges

Updated with recent stock prices.

MINNEAPOLIS (TheStreet) -- Though its revenue grew in the first quarter, Medtronic(MDT Quote) couldn't avoid litigation and restructuring charges that pushed its earnings down 38%.

Before Tuesday's opening bell, Medtronic said its bottom-line fell to $445 million, or 40 cents a share, compared with $723 million, or 64 cents a share, in the year-earlier quarter.

But after excluding items, the company said adjusted earnings came to $883 million, or 79 cents per share, topping Wall Street's targets by a penny.

Medtronic also said its sales grew across most business segments, with total revenue coming in at $3.93 billion, up nearly 6% from the $3.71 billion it recorded a year ago.

According to Thomson Reuters, a group of analysts expected Medtronic to produce earnings of 78 cents a share on revenue of $3.81 billion.

The restructuring and legal charges stem from events that have clouded the company's prospects. Over the past few years, Medtronic has been on a job-slashing binge. In May, the maker of medical equipment announced up to 1,800 cuts following an underwhelming fourth-quarter showing.

In late July, the company settled a decade-long patent suit with Abbott Laboratories(ABT Quote) over the design of vascular stents. The 32-cent after-tax charge in the most-recent quarter stemmed from Medtronic's agreement to pay Abbott $400 million and sub-licensee evYsio Medical Devices another $42 million.

"I am confident that our efforts to fuel innovation and develop a strong product pipeline positions us well for sustained growth during the remainder of the fiscal year and beyond," CEO Bill Hawkins said in a statement.

Later, he added, "Our focused efforts to provide innovative solutions to the growing and global challenge of chronic disease are enabling us to bring our therapies to more people than ever before."

In midday trading Tuesday, Medtronic shares were changing hands down 44 cents, or 1.2%, at $37.56.

Elsewhere in the medical-equipment and healthcare sectors, shares of Allergan(AGN Quote), C.R. Bard(BCR Quote) and Boston Scientific(BSX Quote) gained 0.2%, 1.4% and 1.1% each midday Tuesday.

Shares of Johnson & Johnson(JNJ Quote) added 7 cents to $61.35. St. Jude Medical(STJ Quote) was up 23 cents to $38.15.

-- Reported by Sung Moss in New York