Medtronic (NYSE:MDT) said on Tuesday that new products and increasing demand in its emerging markets helped lift its third-quarter profit ahead of Wall Street estimates, though its shares still slipped intraday on a weaker outlook and overhaul that will reduce its workforce by 5%.
The company reaffirmed its full-year revenue outlook, but tightened its 2011 earnings guidance, now expecting a per-share profit in the range of $3.38 to $3.40 a share, slightly weaker compared with its earlier view of $3.38 to $3.44 a share.
The medical device maker, which has struggled with ailing sales as patients postponed treatments, said it would cut 1,500 to 2,000 jobs in an effort to tighten costs. Medtronic is searching for a new chief executive to replace Bill Hawkins when he steps down at the end of April.
The Minneapolis-based company posted net earnings of $924 million, or 86 cents a share, up 11% compared with $831 million, or 75 cents a share, in the same quarter last year, ahead of average analyst estimates polled by Thomson Reuters of 84 cents.
Revenue was $3.96 billion, up 3% from $3.85 billion a year ago, narrowly missing the Street’s view of $3.97 billion.
Sales were fueled by demand for its new products and in emerging markets, which climbed 26%. The results were also helped by a 5% increase in international sales to $1.7 billion.
“Our newly launched products are clearly capturing the interest of both physicians and patients, setting the stage for solid future performance and continued leadership for Medtronic,” said Hawkins.
Medtronic’s cardiac and vascular group saw a 4% gain in worldwide sales, driven by stronger demand in its structural heart, endovascular and AF solutions, offset by modest declines in cardiac rhythm disease management.
Restorative therapies ticked 8% higher on its diabetes and surgical technologies business, further helped by renewed growth in its spinal unit. Diabetes also boosted sales, up 10% on continuous glucose monitoring products and global insulin pumps.