Medtronic Inc., 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.
Net income in the three months ended July 26 increased 10 percent to $953 million, or 93 cents a share, from $864 million, or 83 cents, a year earlier, the Minneapolis-based company said today in a statement. Revenue of $4.08 billion fell short of the $4.12 billion average of 16 analysts’s 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 a 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 Officer 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, competitive outside the U.S. 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 today.
The company’s expenses related to the 2011 acquisition of Ardian Inc. fell by $96 million. Medtronic purchased Ardian for the company’s hypertension device that destroys nerves near the kidneys. The milestone payments due to Ardian shareholders will be lower than originally anticipated due to slower-than-expected demand in Europe, where the device is currently sold, and a slower than anticipated approval process in the U.S.
Medtronic fell 2.4 percent to $52.83 at the close in New York. The shares have gained 29 percent this year.