August 20, 2013, (INVESTOR’S BUSINESS DAILY)–Medical-device giant Medtronic (MDT) met analysts’ quarterly profit estimates and issued in-line guidance Tuesday, but sales came up short, sending shares down 2.4% to close at 52.83.Medtronic’s (MDT) earnings for the fiscal first quarter ended July 26 rose 4% over the year-earlier quarter to 88 cents a share, matching analysts’ consensus. Revenue rose 2% to $4.08 billion vs. consensus of $4.11 billion.The maker of pacemakers and more guided EPS for fiscal 2014 in the range of $3.80 to $3.85 a share, up from $3.75 the previous year
and in line with the Street’s views.Sales of implantable cardioverter defibrillators, or ICDs, which treat heart arrhythmias, fell 3% worldwide and 4% in the U.S., and came up about $25 million short of consensus at $655 million.Analyst Glenn Novarro of RBC Capital Markets wrote in a client note that Medtronic appears to be losing share in this stiffly competitive market, compared with the rivals that have reported recent results.The main beneficiary was St. Jude Medical (STJ), whose stock jumped more than 5% after its bullish Q2 report last month. Although its ICD sales were flat on a constant-currency basis, the overall shrinkage of the market meant that it gained 0.4 percentage points of market share, the exact same amount that Medtronic lost, according to Novarro’s estimates. The third major player, Boston Scientific (BSX), held steady.
On the conference call with analysts, however, Medtronic CFO Gary Ellis implied that the ICD problems were temporary.
“Due to the phase and timing of our new products, there were many instances where we were not able to get our new products and their associated pricing premiums on new hospital contracts before the end of the quarter,” he said. “At the same time, our U.S. ICD implant dynamics changed markedly during the quarter following the midquarter release of Viva and Evera, with a daily implant growth rate shifting from negative to positive in the back half of the quarter.”
Viva and Evera, which were launched in the U.S. in early May, are “next-generation” defibrillators that the company says are more comfortable for patients and reduce hospitalizations for heart failure.
Spinal Products Sales Fall, Beat
Sales of spinal products declined 3% in the quarter, but that was better than Wall Street had feared, as that area of medicine has been struggling for some time.
Ellis said the market appears to be stabilizing and that Medtronic is gaining share through new technologies for improving spinal surgeries.
Source: Amy Reeves.http://news.investors.com/technology/082013-668141-mdt-stock-falls-after-q1-sales-miss.htm?ref=HPLNews.
Medtronic Earnings Keep Pace, But Sales Fall Short
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