Medtronic Inc. (NYSE: MDT) said Tuesday its fourth-quarter earnings spiked eightfold on increased sales, following rival Boston Scientific Corp.�s (NYSE: BSX) defibrillator products recall in March.
Medtronic, the heart devices maker, said net income for the quarter ended April 30 soared to $954 million, or 86 cents per share, up eightfold from $103 million, or 9 cents per share, for the equivalent period last year.
Analysts polled by Thomson Reuters estimated earnings to reach 88 cents a share.
Total revenue increased 9.6% to $4.2 billion, and up 6% excluding currency exchange fluctuations.
The company said the one-time jump in earnings is unsustainable, however, as Boston Scientific has received clearance from the FDA to reinstate previously recalled products. Boston Scientific was told to recall due to failures to notify the government watchdog of manufacturing changes made to five of its defibrillator-related devices.
Medtronic�s chairman and CEO William A. Hawkins said the company snatched two-thirds of Boston Scientific�s U.S. defibrillator market during the sales hiatus imposed upon the Natick, Mass.-based company.
This one-time boon to Medtronic�s top line added between $60 million and $70 million in revenue for the fourth quarter.
�We are working hard to protect as much of what we gained as we can,� he said in a telephone interview with Dow Jones Newswires.�They�ve recaptured a fair amount of what they lost, but they have not gained it all back.”
Medtronic saw a 13%� jump in defibrillator sales to $881 million during the fourth quarter. Backing out approximately $65 million in sales due to the recall, the company�s U.S. sales were essentially flat.
Gross margin calculates to 75.9%, little changed from 75.7% from a year ago.
Medtronic said it expects fiscal 2011 earnings to fall within the range of $3.45 and $3.55 per share. Analysts estimated full-year profit to reach $3.48 per share.
Chief Financial Officer Gary Ellis expects earnings to reach the bottom end of its estimate range until he sees results of the company�s turnaround efforts in its under-performing spinal products business.
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