Medtronic misses analysts’ estimates

Medtronic, the world’s biggest maker of heart-rhythm devices, said fiscal first-quarter sales missed analysts’ estimates on weaker-than-expected demand for defibrillators and the InFuse bone-growth product.

The company employs nearly 2,000 people at its manufacturing plant in Galway where it makes key cardiovascular medical devices.

Net income in the three months ended Jul 26 increased 10% to $953m, or 93 cents a share, from $864m, or 83 cents, a year earlier, the Minneapolis-based company said in a statement.

Revenue of $4.08bn fell short of the $4.12bn average of 16 analysts’ estimates compiled by Bloomberg. Profit excluding one-time items matched the 88 cents average estimate of 20 analysts.

Sales of Medtronic’s CoreValve, used to repair damaged aortic valves, were stopped in Germany after a district court in Mannheim in July found the devices infringed a patent held by Edwards Lifesciences Corp.

Chief executive Omar Ishrak reiterated the company’s earnings forecast of $3.80 to $3.85 a share, excluding certain items, for fiscal year 2014, saying sales of other new products should replace any lost demand for CoreValve in Germany.

“Despite clearly strong execution to date, with incremental headwinds as we move through the year — including, but not limited to, competition outside the US defibrillator and pacemaker launches, as well as a CoreValve injunction in Germany — we continue to think Medtronic’s fiscal year 2014 organic sales growth and EPS guidance may be at risk,” said Danielle Antalffy, an analyst with Leerink Swann Research in New York, in a note to clients yesterday.

The company’s expenses related to the 2011 acquisition of Ardian fell by $96m.

Medtronic purchased Ardian for the company’s hypertension device that destroys nerves near the kidneys.

Bloomberg