CHICAGO (Reuters) - Medtronic Inc on Tuesday posted a quarterly profit that topped expectations as demand for stents and pain management products offset declining sales of implantable devices to treat irregular heartbeats.
Shares of the world's largest stand-alone medical device maker rose 7 percent to $35.18 in early New York Stock Exchange trading.
MEDTRONIC (MDT.NY)in the past year has lost market share in cardiac rhythm management devices to competitors St. Jude Medical Inc
"Considering the recent negative sentiment entering the quarter and fears of additional CRM and spinal share loss, the earnings release appears good enough, and we could see some relief for Medtronic shares," Morgan Stanley analyst David Lewis said in a note to clients.
Medtronic said net earnings were $723 million, or 65 cents a share, in its fiscal third quarter that ended January 23. That compared with $77.0 million, or 7 cents a share, in the same period a year ago, when charges for acquiring spine products maker Kyphon Inc trimmed results.
Excluding one-time items, Medtronic reported a profit of 71 cents a share.
Analysts on average expected Medtronic to earn 70 cents a share, according to Reuters Estimates.
Third-quarter revenue rose 3 percent to $3.5 billion, in line with the average analyst estimate.
"Sales overall were a little weak, but they were in line with expectations," said Jeff Jonas, portfolio manager with Gabelli Health and Wellness Trust, which owns Medtronic shares.
He said the company's profit beat the analysts' consensus estimate by a penny largely due to positive operating leverage gained through expense controls.
Medtronic said revenue from cardiac rhythm disease management devices, which include pacemakers and implantable cardioverter defibrillators, or ICDs, fell 4 percent to $1.17 billion.
Spine division revenue rose 3 percent to $832 million. Revenue from cardiovascular products, which include stents to treat clogged heart arteries, rose 10 percent to $565 million. Revenue from neuromodulation products rose 11 percent to $354 million, and diabetes product revenue rose 7 percent to $277 million.
(Reporting by Susan Kelly; Editing by Steve Orlofsky and Maureen Bavdek)
