Medtronic Inc on Tuesday posted a 19 percent rise in quarterly profit, driven by lower operating expenses and higher sales of its devices to treat heart disease, diabetes and other chronic disorders.
While earnings per share topped the average analyst estimate by a penny, total revenue was slightly shy of expectations as softness in pacemakers and spinal products dragged on results.
Overall, revenue rose 10 percent, as growth in implantable heart defibrillators, stents, blood glucose monitors and neuromodulation devices helped offset the weakness in spine and pacemakers.
After a string of positive quarters, Medtronic (third-quarter) results were somewhat mixed on weak spine and pacing numbers as other business segments were in line or better, Morgan Stanley analyst David Lewis said in a note to clients.
Net earnings in the fiscal third-quarter ended January 29 were $831 million, or 75 cents a share, up from $698 million, or 62 cents a share, a year ago.
Excluding special items, Medtronic earned 77 cents a share.
Analysts on average expected 76 cents a share, according to Thomson Reuters I/B/E/S.
Medtronic has restructured operations and reallocated resources into higher-growth businesses as the economic downturn led to rising unemployment, a slowdown in medical procedures and pressure on pricing.
Q3 was another step in building our track record of consistent performance, Medtronic Chief Executive Bill Hawkins told analysts on a conference call.
Third-quarter revenue rose 10 percent to $3.85 billion, compared with analysts' average forecast of $3.87 billion. Revenue rose 6 percent when adjusted for a favorable $144 million foreign exchange impact.
Medtronic raised the low end of its fiscal 2010 per-share earnings forecast and expects profit to be in a range of $3.20 to $3.22, up from its previous outlook of $3.17 to $3.22. It continues to expect sales growth of 5 percent to 8 percent on a constant-currency basis in the fourth quarter.
Its shares slipped 1.7 percent to $42.91 in premarket trading.
(Reporting by Susan Kelly; Editing by Derek Caney, Dave Zimmerman)