Earnings Preview: Medtronic

Medtronic (MDT) is expected to report Q2 earnings before market open Tuesday Nov. 18, with a conference call scheduled for 8:00 am ET.

Guidance

Analysts are looking for a profit of 71c on revenue of $3.69B. The consensus is 69c to 73c for EPS, and revenue of $3.61B to $3.80B, according to First Call. In its Q1 earnings release, Medtronic reported EPS of 72c compared to consensus of 69c and revenue of $3.71B compared to consensus of $3.67B. In August, the company reiterated FY09 revenue guidance of $15B to $15.5B.

Analyst Views

Positive influences for this quarter include growing market share in diabetes and a strong growth in its stent market share. Negative influences for this quarter include pressures in the in the domestic ICD market and the recent strength in the dollar.

On November 12, a JP Morgan survey indicated decreased use of InFuse in the wake of a July FDA warning letter and a whistleblower suit accusing 136 spine surgeons of promoting off-label use. The firm said there is cause for concern, as InFuse sales are starting to slow and likely to come in below expectations.

In an early October note, Citigroup recommended some medical technology names including Medtronic. Citigroup believes medical technology names are relatively well insulated from the current economic weakness and expects strong quarters to be reported in the space.