Medtronic Posts FQ2 Earnings Beat; Defibrillator Recall Hit Less Than Expected

| About: Medtronic plc (MDT)

Medical device maker Medtronic Inc. late Monday announced financial results for FQ2 2008, recording revenue of $3.12 billion, a 2% increase over the $3.07 billion reported in Q2 of fiscal year 2007. Net earnings for the quarter were $666 million ($0.58/share), down 2.2% from $681 million ($0.59/share) from Q2 in 2007, as sales of high-margin cardiac rhythm disease management products dropped 8% to $1.15 billion and sales of defibrillators (ICDs) fell 16% to $639 million. Analysts surveyed by Thomson Financial had estimated earnings of $0.56/share based on revenue of $3.1 billion. Medtronic reported inventory write-offs and other expenses of $31 million following the Oct. 15 Fidelis Sprint defibrillator leads recall (full story). Medtronic had said earlier this would lower the company's revenue. During a conference call, Medtronic executives said costs from the recall, and its effect on sales, reduced Q2 profit by $0.09-0.10/share. "The recall impact was less than expected, but ICD sales were still weak," Gabelli Securities Inc. analyst Jeff Jonas, said. "I don't think it was as bad as many people feared." Shares gained 2.8% in extended trading.

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