Medtronic Profit Down After Charge for Blood Pressure DeviceMichelle Fay Cortez
Medtronic Inc., the world’s biggest maker of heart-rhythm devices, said fiscal third-quarter profit fell 23 percent after it took a charge for the 2010 acquisition of Ardian Inc. and its failed high blood pressure treatment.
Net income in the three months ended Jan. 24 fell to $762 million, or 75 cents a share, from $988 million, or 97 cents, a year earlier, the Minneapolis-based company said in a statement. Profit of 91 cents a share, excluding one-time items such as the $200 million write-off of Ardian assets, matched the average of 18 analyst estimates compiled by Bloomberg.
A panel of experts is reviewing the study results for the hypertension treatment, a device designed to reduce blood pressure by searing nerves that contribute to its rise, said Chief Executive Officer Omar Ishrak. A recommendation on whether to keep developing the technology may come when the study is presented at the American College of Cardiology meeting in D.C. next month, said Chief Financial Officer Gary Ellis.
“The independent panel is a separate group of experts in general hypertension, renal denervation and clinical trial design,” Ishrak said in a telephone interview. “They are just beginning to look right now, seeing an early version of the data already.”
Medtronic fell 1.2 percent to $56.19 at the close in New York trading. The shares have risen 19 percent in the past 12 months.
The company narrowed its earnings forecast for fiscal 2014 to $3.81 to $3.83 a share, from $3.80 to $3.85 a share.
Sales for the quarter rose 3.4 percent to $4.16 billion, up from $4.03 billion a year earlier, as all of the company’s businesses had stable or increasing growth, Ishrak said. Sales of the MiniMed 530G, an insulin pump that is able to temporarily stop infusing the hormone when blood sugar levels fall too low, have increased after Medtronic resolved an early supply issue, he said.
“In a market which is basically flat, we find ourselves increasing our new pump volume,” he said.
The company’s two biggest businesses, spine and heart rhythm, have both stabilized after several quarters of falling sales, Ellis said. The insulin pump and the company’s CoreValve, a replacement aortic valve approved last month that is threaded into the heart via a catheter to avoid open heart surgery, are providing product diversity to help withstand challenges and uncertainties that seem to occur each quarter, he said.
“We can take those body blows a little bit better and still achieve that revenue growth,” he said.