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Medtronic Reaffirms Guidance

The medical device company still expects full-year revenue growth at the low end of 12%-to-14% range.



said Wednesday that it expects sales and earnings growth to be "consistent with current consensus estimates and ranges" for the third quarter ending Jan. 31 and the fiscal year ending April 30.

Rachel Scherer, vice president for investor relations, told analysts in a telephone conference call that the company still expects revenue growth "at the low end" of the 12%-14% range for the fiscal year, producing revenue of $10 billion or more. She said earnings per share growth for the year should be in the 14% to 16% range.

The consensus view by analysts polled by Thomson First Call is for third-quarter EPS of 45 cents and fiscal year EPS of $1.87. In November, Medtronic said it was comfortable with third-quarter EPS in "the lower end "of analysts' predictions of 45 cents to 48 cents. The company also said at the time that the Thomson First Call range of $1.86 to $1.89 EPS for the fiscal year "appears reasonable."

Since November, the Thomson First Call consensus has dropped by 2 cents to 45 cents for the third quarter and by 3 cents to $1.87 for the full fiscal year.

Scherer said the company was sticking to its oft-repeated prediction that it expects long-term EPS growth averaging 15% annually.

Scherer added that the company believes the

New England Journal of Medicine

will publish this month the results of a major study showing that implantable cardioverter defibrillators, or ICDs, can extend the lives of heart patients.

Preliminary results of this test, sponsored by the National Institutes of Health, were released last March. The findings bode well not only for Medtronic, which is the market leader in ICDs, but also for




St. Jude Medical


. ICDs are surgically implanted devices that treat dangerous rapid heartbeats by delivering electrical shocks to the heart.

The study compared an ICD with a heart drug to determine which would prevent sudden death in heart-failure patients. The study said an ICD "significantly reduces deaths in heart failure patients," according to NIH. At the end of the study, the death rate among ICD patients was 22%, compared with 28% for patients taking the heart drug Cordarone and 29% for patients receiving a placebo,

Publication in a prominent medical journal will give all ICD makers greater marketing clout, as will final regulations by the federal Medicare program expanding coverage to more heart patients. In late September, the federal Centers of Medicare and Medicaid Services, or CMS, issued tentative guidelines that analyst said could expand the number of eligible Medicare recipients by one-third to nearly 500,000 people. CMS is expected to issue final guidelines soon.

Medtronic's was off 18 cents, or 0.4%, to $48.93.