Medical equipment maker Medtronic, Inc. (MDT) is scheduled to report second-quarter results for fiscal year 2010 before the market opens on Tuesday. On average, 28 analysts polled by Thomson Reuters expect the company to earn $0.74 per share for the quarter with estimates ranging between $0.72 and $0.77 per share. Revenues are estimated to be $3.75 billion. Analysts' estimates typically exclude special items.
The Minneapolis, Minnesota-based company operates in seven segments: Cardiac Rhythm Disease Management, Spinal, CardioVascular, Neuromodulation, Diabetes, Surgical Technologies and Physio-Control. Its primary markets for products are the U.S, Western Europe and Japan.
For the fiscal year ended April 24, 2009, the company reported revenues of $14.599 billion, with Cardiac Rhythm Disease Management generating 34% of it, while Spinal and Biologics brought in 23% of total annual revenue. CardioVascular segment reported 17% of the total revenue, while Neuromodulation generated nearly 10% of the total amount. Diabetes annual revenue formed 7% of the total, while revenue from the Surgical Technologies business comprised nearly 6% of the total revenue. Physio-Control contributed over 2% to total annual revenue.
The economic crisis was affecting medical equipment makers too, as hospitals were forced to reduce spending. However, the indications of a recovery in the economy may reflect on the company's topline.
Early this month, Credit Suisse upgraded shares of Medtronic to "Outperform" from "Neutral" and increased its price target to $49 from $41. The brokerage noted that Medtronic's base businesses, particularly cardiac rhythm management and spine, are showing signs of stability and this should continue. Medtronic is delivering on its cost savings and operating margin leverage opportunities, the firm added.
Credit Suisse said that over the next year and beyond, Medtronic would launch a series of new products, most notably within the cardiac rhythm management and diabetes areas, which should accelerate underlying sales growth. The brokerage expects an inline second quarter for the medical equipment maker.
In August, the company reported a 38% decline in its first-quarter profit for fiscal year 2010, hurt by charges related to restructuring and litigation. The company's first-quarter net earnings dropped to $445 million or $0.40 per share from $723 million or $0.64 per share reported last year. Net sales grew 6% to $3.93 billion from $3.71 billion in the prior-year quarter.
For the second quarter of fiscal year 2009, the company reported net earnings of $571 million, or $0.51 per share. Revenue for the quarter was $3.570 billion.
Last week, the company announced that it received a warning letter from the FDA regarding the inspection of its Cardiac Rhythm Disease Management facility in Mounds View, Minnesota that was completed in August. The promised corrective actions of the company have been found to be adequate to address the concerns raised in the letter, according to the FDA, and will be confirmed upon reinspection. Medtronic said it is working with FDA to resolve all remaining issues as quickly as possible and would respond to the letter within 15 days.
Among others in the industry, Boston Scientific Corp. (BSX) in October reported a profit for the third quarter, helped by higher sales mainly from the Cardiac Rhythm Management segment. The company posted net income of $200 million or $0.13 per share for the third quarter of 2009, compared to a net loss of $62 million or $0.04 per share in the prior year quarter. Third-quarter net sales increased 2% to $2.025 billion from $1.978 billion in the third quarter of 2008.
Another rival, St. Jude Medical Inc. (STJ) last month reported a decline in third-quarter profit, hurt by one-time charges mainly associated with employee termination. Third-quarter net earnings slipped to $166.94 million or $0.48 per share from $184.70 million or $0.53 per share in the same quarter last year. Net sales for the quarter rose 7% to $1.16 billion from $1.08 billion reported a year ago.
MDT closed Monday's regular trade at $40.31, up $0.69 or 1.74%, on 5.61 million shares. For the past year, the stock traded in the range of $24.06-$40.46.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.