Feb. 18--Medtronic, Inc. on Tuesday reported that fiscal third quarter net profit fell 23 percent on expenses that included a charge related to discontinued testing of a high blood pressure treatment.
Net earnings amounted to $762 million, or 75 cents a diluted share. Revenue was $4.16 billion, an increase of 3 percent over the same quarter a year ago, and up 4 percent when accounting for differences in foreign currency.
Company officials attributed the earnings decline to the absence of a research and development tax credit Medtronic received in the same quarter last year, as well as higher levels of interest expense and U.S. medical device excise tax than it paid in the same quarter last year.
Medtronic also took impairment charges associated with the company's disappointing renal denervation clinical trial that was discontinued as the program is being re-evaluated.
Excluding those charges, Medtronic reported diluted earnings per share of $0.91, in line with Wall Street expectations.
Third quarter international revenue of $1.90 billion increased 2 percent, or 4 percent on a constant currency basis. International sales accounted for 46 percent of Medtronic's worldwide revenue in the quarter. Emerging market revenue of $521 million increased 12 percent on a constant currency basis or 10 percent as reported and represented 13 percent of company revenue.
"In Q3, our overall organization once again delivered balanced growth, with strong performances in some areas offsetting challenges in other parts of our business," said Omar Ishrak, Medtronic chairman and CEO. "We remain focused on building a track record of operational execution to deliver consistent and reliable results."
In early notes to investors, several analysts who follow the medical device industry said Medtronic's numbers were mostly in line with expectations.
During a conference call with analysts, Ishrak said all eight of Medtronic's primary businesses were either stable or growing.
Medtronic officials said they expect revenue growth in the range of 3 to 4 percent for the full fiscal year, as well as the fourth quarter.
The company now expects fiscal year 2014 diluted earnings per share in the range of $3.81 to $3.83, which implies annual diluted non-GAAP EPS growth of approximately 6 percent after adjusting for certain tax benefits the company received in fiscal year 2013, as well as higher levels of interest expense and U.S. medical device excise tax in fiscal year 2014.
James Walsh -- 612-673-7428
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