MEDTRONIC, THE world's second-largest medical device maker, said earnings beat analysts' estimates, driven by sales of a new heart stent and reductions in jobs and expenses.
Net income for the fiscal first quarter to July 25th rose 11 per cent to $747 million, or 66 US cents a share, the Minneapolis company said yesterday.
Earnings, excluding some items, beat analysts' estimates by three cents.
Revenue jumped 19 per cent to $3.71 billion, led by increases of 30 per cent or more in the device maker's spinal and stent divisions.
Medtronic, which expanded its spinal care unit with the $3.81 billion purchase of Kyphon last year, won US approval in February for its drug-coated Endeavor stent, which chief executive William Hawkins yesterday said had captured 19 per cent of the US stent market during the quarter.
"The company is starting to show it can grow at a reasonable rate," said Jan David Wald, a Stanford Group analyst in Boston. "Investors may wait a little longer to get excited about the story, but it does show something good is happening."
Medtronic employs close to 2,000 people in Ireland where it has a vascular operation in Galway. The company first entered Ireland in 1999 through the acquisition of Arterial Vascular Engineering (AVE).
The Galway operation is involved in the manufacture of the Endeavor drug-eluting stent.
Medtronic reiterated its earnings forecast of $2.94-$3.02 a share for fiscal year 2009 and will have revenue of $15-15.5 billion, chief financial officer Gary Ellis told investors and analysts on a conference call.
Medtronic slashed 1,100 jobs in May, 2.8 per cent of the workforce, to cope with slowing growth for pacemakers and defibrillators, which generate 37 per cent of Medtronic's sales. A year earlier, Medtronic had earnings of $675 million, or 59 cents.
The cardiovascular unit, which recorded $80 million in sales from the Endeavor stent during the quarter, jumped 30 per cent to $631 million.
Regulators approved Endeavor for use in the US in February, and the company said US stent sales almost tripled in the quarter, rising 173 per cent.
The company competes in the coronary stent market with Boston Scientific and Abbott, both of which have Irish plants that are heavily involved in their stent programmes. - (Bloomberg)
