Medtronic CEO: Stent, Defibrillator Sales Drove 4Q Earns
Dow Jones Newswires
NEW YORK -- Strong sales of coronary stents and defibrillators helped Medtronic Inc. (MDT) rack up a 31% increase in fourth-quarter earnings over the year-earlier period, said William George, the company's chairman and chief executive.
"We've seen a big surge in our stent business," George told CNBC, noting that sales of the tiny mesh devices used to prop open arteries increased 68% during the quarter.
World-wide, George said, Medtronic has about 30% of the market share for stents, second only to Guidant Corp. (GDT).
Earlier Wednesday, Medtronic reported fourth-quarter earnings of $321.7 million, compared with $246.2 million a year ago. Overall sales for the period rose 24% to $1.4 billion.
Where Medtronic leads in market share is defibrillators, George said, with 54% of the sales in implantable devices and 50% in external ones. Sales were up 26% for implantable devices for the quarter, he said, 85% for external ones.
Defibrillators regulate irregular heart rhythm with electric shock.
The company has its eye on what George says is a "multi-billion-dollar" potential market for devices to combat congestive heart failure. With three products in the pipeline, he said, Medtronic should be in a position to capture much of that business during the next two to five years.
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Medtronic CEO: Co Holds 54% Of Worldwide ICD Mkt
Dow Jones Newswires
By Johanna Bennett
NEW YORK -- Medtronic Inc. (MDT) officials said rival Guidant Corp.'s (GDT) new implantable heart device did little to loosen the company's hold on the implantable electronic-defibrillator market.
In a conference call with analysts to discuss fiscal fourth-quarter earnings, Medtronic Chief Executive William George and President and Chief Operating Officer Art Collins said the company's implantable electronic-defibrillator business captured 54% of the world-wide market, despite Guidant's launch of its rival product, the Prizm, earlier in the quarter.
"Any time a new product is introduced, there will be trials by the (doctors)," Collins said. "We did not see any significant competitive damage from the Prizm."
Analysts have been especially anxious for news about Medtronic's market share in the defibrillator and stent businesses in order to gauge the market's reaction to the flurry of new products released over the last few months by the company and competitors Guidant and Boston Scientific Inc. (BSX).
Medtronic reported fiscal fourth-quarter profits of $321.7 million, or 26 cents a share, excluding items, up 31% from the previous year. Sales jumped 25% to $1.43 billion from $1.15 billion.
Medtronic's Cardiac Rhythm Management, which includes pacemakers and defibrillators - electronic devices used to regulate irregular heart beats - generated almost half of the company's revenue. Sales totaled $700 million, up nearly 18% from a year earlier.
Meanwhile, Medtronic's stent business apparently benefited from last year's release of the S670.
Sales from the company's vascular business climbed 70% to $253 million, with coronary vascular sales, which include stents, small wire-mesh tubes used to unblock clogged arteries, jumping 55%.
Officials said Medtronic has the second-largest stent market share, with more than 30% of the world-wide market.
- Johanna Bennett; Dow Jones Newswires; 201-938-5240; johanna.bennett@dowjones.com
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Medtronic 4Q Profits Up 31%, Boosted By New Products
By JOHANNA BENNETT
NEW YORK -- Sales of new products, particularly stents and heart devices, appeared to drive Medtronic Inc.'s (MDT) fiscal fourth-quarter revenues and boost profits 31%.
Operating profits rose to $321.7 million, or 26 cents a share, in the quarter ended April 30 from $246.2 million, or 20 cents, a share last year.
Sales climbed 26% to $1.43 billion, including the loss of $16.8 million in sales due to foreign currency exchange rates, compared with $1.15 billion last year.
Medtronic met earnings expectations. First Call/Thomson Financial had predicted profits of 26 cents a share. But the company's top-line figure beat many estimates and elicited strong praise from Wall Street analysts, despite lower than expected margins.
"I am on cloud nine," said Banc of America Securities analyst Kurt Kruger.
Medtronic officials trumpeted the company's across-the-board-performance, with growth in its major businesses outpacing the growth in the market.
Known as the world's largest manufacturer of pacemakers, Medtronic has been expanding into other areas, including devices for spinal surgery, heart failure and angioplasty.
More than 70% of the company's fourth-quarter sales stemmed from products introduced within the last two years. And about 35% of the company's revenues were generated by sales from the six new acquisitions, which include Arterial Vascular Engineering Inc., Sofamor Danek Group Inc. and Xomed Surgical Products Inc.
"The across-the-board strength in fourth-quarter revenues demonstrates that Medtronic's strategies of innovation and diversification are working in harmony," Chairman and Chief Executive William W. George said in a prepared statement released Wednesday.
Medtronic's once ailing stent business continued to show signs of rejuvenation, due largely to last year's release of the S670 stent. Sales of vascular products jumped 70% to $253 million, including a 55% jump in revenues from coronary vascular products.
Meanwhile, Medtronic's cardiac rhythm management business rang up sales of $700 million, an 18% increase over last year. Sales of implantable electronic defibrillators jumped 26%, exceeding the market growth rate, while pacemaker sales climbed 9%, ahead of the market's 7% growth rate.
Shares of Medtronic were trading at 48 5/8, up 3/4, or 1.6%, on trading volume of 2.8 million shares compared with an average daily trading volume of 3.6 million shares.
"I am impressed," said Gerard Klauer Mattison & Co. analyst Jonathan Foster. "The major message here is that Medtronic is back to delivering very strong results on the top line. The ICD (implantable electronic defibrillator) and stent numbers were very impressive."
Wall Street analysts had anxiously awaited news of Medtronic's position in the stent and defibrillator markets in hopes of getting a better take on where the major medical device companies stood in terms of market share.
Medtronic claimed to have captured 54% of the defibrillator market and more than 30% of the stent market, despite new products released by rival companies such as Guidant Corp. (GDT), Boston Scientific Corp. (BSX) and Johnson & Johnson (JNJ). That leads analysts to believe Medtronic has been successful in fighting off trespassers.
"The ICD and stent numbers were very impressive and answered the questions as to who is number one in ICDs. The answer is Medtronic," Foster said.
Also, analysts viewed Medtronic's results as proof that the defibrillator market is not undergoing a slowdown, as some industry pundits had predicted last year, but rather growing faster than expected.
"It's great for the entire market," said Morgan Stanley Dean Witter analyst Glenn Reicin. "It tells you that there is much more market to go around."
Shares of Guidant and Boston Scientific were off modestly in Wednesday's trading.
-Johanna Bennett; Dow Jones Newswires; 201-938-5240; johanna.bennett@dowjones.com
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Busy day for MDT in the news |
