Medtronic Cuts Guidance on Sluggish Revenue

By Austen Hufford 

Medtronic PLC on Tuesday said revenue growth lagged behind expectations in the latest quarter while customers waited for new product releases, and the company signaled some of that sluggishness could linger.

Shares fell 5.7% to $76 in premarket trading as the company also cut its guidance for the quarter.

"Revenue was disappointing and did not meet our expectations," Chief Executive Omar Ishrak said. Slower-than-expected revenue growth was hurt by upcoming new product introductions in its cardiovascular and diabetes units, which reduces the demand for current products as consumers wait for new ones.

In September, the Food and Drug Administration approved for sale a long-awaited insulin pump made by Medtronic in a significant advance toward a so-called artificial pancreas for Type 1 diabetes patients, as it takes some of the guesswork out of blood-sugar control.

The company said new products should drive revenue growth back to normal ranges but also warned that "some of the challenges" that hurt revenue in the quarter could continue in the near term.

Medtronic said it now expects revenue growth in the mid-single digit range compared with the upper half of the mid-single digit previously forecast. It also now expects fiscal year 2017 adjusted earnings per share of between $4.55 to $4.60, down from between $4.60 to $4.70 previously.

Medtronic reported a fiscal first-quarter profit of $1.12 billion, or 80 cents a share, compared with $520 million, or 36 cents a share, a year ago. Excluding items, the company earned $1.12 a share. Analysts polled by Thomson Reuters expected earnings of $1.11 a share.

Revenue grew 4.1% to $7.35 billion.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

November 22, 2016 08:16 ET (13:16 GMT)

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