April 20, 2024

Medtronic’s Profit Falls 19 Percent on Layoff Costs

The company’s quarterly profit fell short of Wall Street estimates, as did its outlook for the new fiscal year.

Stock in Medtronic, which is based in Minneapolis, fell $1.06, or 3 percent, to $40.20 a share in early trading.

Medtronic said it earned $776 million, or 72 cents a share, down from $954 million, or 86 cents a share, a year earlier. Excluding $198 million in charges related to layoffs, asset write-downs and other costs, the company earned 90 cents a share.

Sales in the period, which ended April 29 and which was the fourth quarter of Medtronic’s fiscal year, rose 2 percent, to $4.3 billion, from $4.2 billion in the same period a year ago.

Analysts polled by FactSet expected earnings of 93 cents a share on sales of $4.29 billion, on average.

Medtronic has struggled to maintain earnings growth amid sluggish sales of its two leading products: heart defibrillators and spinal implants. In February the company announced 2,000 layoffs to bolster its financial position.

It forecast revenue growth of 1 to 3 percent for the next fiscal year ending in April, which implies sales of $16.1 billion to $16.41 billion. The company expects to earn $3.43 to $3.50 a share. That includes 4 to 6 cents a share in costs related to its acquisition of a blood pressure treatment maker, Ardian.

Analysts expect a profit of $3.62 a share and $16.7 billion in revenue for the current fiscal year.

For the fourth quarter, sales of implantable heart rhythm products fell 7 percent to $1.32 billion on lower sales of devices that are used to treat rapid heartbeats. Sales of those products, called implantable cardioverter defibrillators, fell 16 percent to $760 million as sales in the United States continued to slump. Sales of cardiovascular devices grew 16 percent to $879 million.

The company’s spinal revenue fell 1 percent, to $875 million. However, sales of diabetes treatments, surgical technology and neuromodulation devices, which treat pain and other conditions by stimulating the nervous system, all improved.

Medtronic said its international sales rose 12 percent on better sales in emerging markets like China, Latin America, India and the Middle East and Africa.

Article source: http://feeds.nytimes.com/click.phdo?i=fe05349af7c69b3585be03821395021f

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