Record earnings for Medtronic, but shares fall

26 February 2006

Medtronic, Inc. (NYSE:MDT) has achieved a record revenue for the quarter ended January 27, 2006, of $2.770 billion, a 9% increase over the $2.531 billion recorded in the third quarter of fiscal year 2005.

"Solid overall growth was again led by our two largest product lines, implantable defibrillators and spinal products. These two product lines accounted for about 45% of the corporation's revenue and, on a constant currency basis, they collectively grew 22% compared to the prior year third quarter," said Art Collins, chairman and chief executive officer of Medtronic. "This year's growth reflects the impact of ongoing investments; for example, during this quarter R&D expenditures increased 16% to $280 million."

Cardiac Rhythm Management (CRM) quarterly revenue was $1.263 billion, representing growth of 10% over the same period last fiscal year. ICD revenue was $723 million in the quarter, representing an increase of 21%. Worldwide pacing revenue was $426 million in the quarter, a decrease of 1%.

Neurological and Diabetes quarterly revenue of $489 million increased 6% over the same quarter one year ago. Neurological revenue of $307 million and Diabetes revenue of $182 million both grew 6%.

Medtronic shares fell after publication of the results as stronger growth had been expected on Wall Street. Shares dipped to 54.07 by close on Friday, the lowest since last October. Product recalls and lawsuits affecting rival Guidant, taken over by Boston Scientific in January, have allowed Medtronic to increase market share.

See the full third-quarter financial report.

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