Medtronic sees 19 percent rise in third-quarter profits

The Commercial Appeal
Feb 24, 2010
By Toby Sells

Medtronic Inc. sales jumped 10 percent to $3.8 billion in its third quarter, led by strong international sales and growth in its cardiovascular unit, the company said Tuesday.

The Minneapolis-based medical device maker slightly beat Wall Street expectations with profits of $831 million in the quarter, up 19 percent over the $698 million in the same period last year.

"With possibly its third quarter of consistent execution on tap, investors could become increasingly encouraged that (Medtronic) is back on track to deliver on its 9 to 11 percent and 11 to 14 percent long-term sales and (earnings per share) growth goals," said Leerink Swann Research analyst Rick Wise in an earnings preview Monday.

U.S. sales were flat at $2.2 billion, but international sales improved nearly 5 percent to $1.6 billion. Cardiovascular sales jumped to $722 million in the quarter from $696 million in the same time last year.

Sales were basically flat for the company's Memphis-based spinal and biologics business, which employs about 1,500. Revenues for the segment fell 2 percent from $862 million in fourth-quarter 2008 to $842 million this year.

Spinal product sales grew 4 percent outside the U.S. in the quarter, and international biologics sales grew 9 percent.

The company raised the low end of its earnings-per-share guidance for 2010 by 3 cents. The company now predicts share values will grow somewhere between $3.20-$3.22 for the year.

"Our third-quarter results reflect a building track record of delivering consistent execution on our financial commitments," said Medtronic CEO Bill Hawkins.

-- Toby Sells: 529-2742

Medtronic Inc.

Ticker: MDT

Scope: largest medical device maker in the world

Memphis: develops and makes products for neurological, orthopedic and spinal conditions

Web site: www.medtronic.com