Medtronic Inc., the world’s biggest maker of heart-rhythm devices, said fiscal third-quarter profit increased 1.2 percent as rising global demand for pacemakers eased a slump in sales of defibrillators and spinal products.
Net income in the three months ended Jan. 27 rose to $935 million, or 88 cents a share, from $924 million, or 86 cents, a year earlier, the Minneapolis-based company said in a statement. Profit excluding one-time items was 84 cents a share, matching the average of 26 analyst estimates compiled by Bloomberg.
Medtronic struggled for the past 18 months with sluggish growth of existing products and falling pretax income, even as it introduced a raft of new devices for the spine, bowel and heart, said Michael Weinstein, a JPMorgan Chase & Co. analyst in New York. Revenue of $3.92 billion for the third quarter was $91 million below estimates, he said in a note to clients today.
“Divisional revenues were generally lower than expected across the board,” said Larry Biegelsen, a Wells Fargo Securities analyst in New York, in a note to clients. “Implantable cardioverter defibrillator and spine sales were much weaker than expected,” he said.
Demand for defibrillators, used to shock a stopped heart back into a normal rhythm, continued to plummet, with sales dropping 8.3 percent to $674 million. Sales of spinal products also fell, led by a 20 percent drop in demand for biologics such as its embattled bone-growth product Infuse.
Sales of pacemakers were $467 million, up 3.8 percent. Global demand for the company’s new drug-coated stents and heart valves boosted cardiovascular sales 8.1 percent to $837 million.
The company forecast earnings to $3.44 to $3.47 per share for fiscal 2012, from $3.43 to $3.50, including dilution from the January 2011 acquisition of Ardian Inc. Analysts currently estimate earnings of $3.45 per share for the year.
Medtronic fell 2.4 percent to $38.99 at 4:05 p.m. in New York Stock Market composite trading. The shares have declined 5.5 percent in the past 12 months.