Medtronics' ( MDT) growth prospects appear robust, but shares fell 1.3% after the company said earnings would be in-line with current expectations and reiterated guidance for its stent development timetable.

In a mid-quarter conference call Wednesday, the company said 2005 earnings would come in between $1.85 and $1.90 a share, with Medtronic most comfortable at the midpoint of that range. That would fall to the low end of the current consensus estimate of $1.90 a share. First- quarter earnings, which will be announced sometime in August, are expected to come in between 42 and 43 cents a share on revenue around $2.4 billion -- both in line with current consensus estimates.

Furthermore, the company said that it has not completed enrollment for clinical trials of its Endeavor III stent, which the company hopes will be a big avenue for growth in the coming years. In keeping with prior guidance, Medtronic said enrollment for the trials would wrap up at the end of the summer, with the company applying for European approval -- and expecting to win it -- by the end of the calendar year.

In reaction to the in-line guidance and lack of stent-related news, investors moved out of the company's shares, dropping the stock 66 cents to $49.05. But on the 90-minute call, company executives hinted that they could be conservative, stressing that it was on track to continue grow earnings by 15%, or more, annually.

"I think we are being a bit conservative ... business is still pretty strong," said Rachel Scherer, spokesperson for the company, on the call. "We have to be conservative midway through the quarter because we don't really know and summer tends to be slower. The first quarter tends to be down sequentially from the fourth quarter. We still feel good about the tone of business."

While many of the company's lines of business are expected to show double-digit percentage growth from last year, the company's vascular business -- which includes stents -- is expected to be flat or up slightly. Without a stent approved for the U.S. market, the lion's share of the company's stent sales stem from Europe.

And getting U.S. approval for drug coated stents is a critical concern for the company, which said it will offer more information on its progress when it releases earnings in a month or so. Already, Medtronic is falling behind rivals in the U.S.

Johnson & Johnson's ( JNJ) Cypher stent has already won approval from the FDA and has been sold in Europe since 2003. In March, Boston Scientific's ( BSX) Taxus stent was approved by the FDA. And like Medtronic, Guidant ( GDT) is also looking to market a drug-eluting stent in the U.S. market.

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