Guidant Revenue Inches Up

The medical device maker beats expectations but its stent unit slows.
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Guidant

(GDT)

said Thursday that it earned $161 million, or 50 cents a share, from continuing operations in the third quarter, up from $145 million, or 46 cents a share, for the same period last year. Revenue inched up to $924.5 million from 920.1 million.

Adjusted income from continuing operations, which includes a tax adjustment of $42 million, or 13 cents a share, was $202 million, or 63 cents a share, compared to $180 million, or 57 cents a share, for the same period last year. The tax adjustments related to a previously announced restructuring charge. In the third quarter of 2003, Guidant reported a tax adjustment of $35 million, or 11 cents a share, for in-process research development relating to an acquisition.

Analysts polled by Thomson First Call were expecting third-quarter net income of $192.3 million, or 60 cents a share, on sales of $918.3 million.

Third-quarter highlights include a 16% increase in worldwide defibrillator sales to $445 million, with the U.S. component growing 13% to $357 million. However, worldwide pacemaker sales were flat at $181 million.

Guidant's coronary stent business suffered a 38% sales decline to $122 million, a reflection of the growing importance of drug-coated stents. Guidant, which is working on a drug-coated stent, still sells so-called bare metal stents.

Stents are metal tubes inserted into arteries to facilitate blood flow after the artery-clogging plaque has been removed. Drug-coated stents, which release a chemical into the vessels to reduce the risk of reclogging, are now made by

Johnson & Johnson

(JNJ) - Get Report

and

Boston Scientific

(BSX) - Get Report

.

Guidant also issued sales and earnings guidance for the fourth quarter of $925 million to $965 million and 63 cents to 68 cents a share. Full-year 2004 sales guidance is $3.72 billion to $3.76 billion and EPS guidance remains at $2.40 to $2.45.

For the full-year 2005, the company continues to project sales of $3.9 billion to $4.1 billion and earnings per share of $2.52 to $2.67.