Medtronic 2Q Profit Rises 59 Percent on Sales

FILE - In this Aug. 16, 2005, the "Rising Man" symbol stands in front of the Fridley, Minn., based...

FILE - In this Aug. 16, 2005, the "Rising Man" symbol stands in front of the Fridley, Minn., based Medtronic. Medical device maker Medtronic said Tuesday, Nov, 24, 2009, its fiscal second-quarter profit rose 59 percent on higher sales of implantable heart devices and stents, while costs fell.(AP Photo/Jim Mone, file)

(AP)

Medtronic reported a surprising 59 percent boost in second-quarter profit Tuesday, as increased sales of implantable heart devices defied reports of weakening demand from competitors.

The sales gains during the quarter prompted the world's largest medical device maker to raise its full-year guidance, sending its shares up more than 7 percent.

The Minneapolis company earned $868 million, or 78 cents per share, in the quarter ended Oct. 30, up from $547 million, or 48 cents per share, a year ago. Excluding a litigation gain and other items, adjusted income totaled $850 million, or 77 cents per share.

Revenue jumped 8 percent to $3.84 billion from $3.57 billion.

Analysts expected profit of 74 cents per share on revenue of $3.75 billion, according to a survey by Thomson Reuters.

It was the second consecutive quarter in which the company beat Wall Street expectations.

"Sales outperformance could suggest market share stabilization after several consecutive quarters of erosion in these business," Leerink Swann analyst Rick Wise wrote in a note to investors.

Sales for the company's cardiac-pacing division, its largest, have been sluggish following safety concerns and reduced spending by hospitals.

Analysts largely expected another quarter of slow sales after rivals St. Jude Medical and Boston Scientific Corp. reported weakening demand for heart implants earlier this fall.

But Medtronic reported a 3 percent rise in sales of heart devices to $1.28 billion, including $754 million in sales of implantable cardioverter defibrillators, the company's best-selling products.

"If Medtronic can repeat this performance for several quarters, it will be a major improvement, in our view," said Lazard Capital Markets analyst Sean Lavin in a research note.

Defibrillators use electrical shocks to correct abnormal heart beats that could be deadly. Sales of pacemaker products, which use low-voltage electrical currents to keep hearts beating, were $498 million.