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Earnings Preview:Medtronic to report 3Q on Tuesday

Fri, 02/18/2011 - 8:45am
The Associated Press

Medtronic Inc., the world's largest medical device maker, announces its fiscal third-quarter earnings on Tuesday morning before markets open.

WHAT TO WATCH FOR: In late December, Medtronic announced that CEO Bill Hawkins will step down in April after three years leading the company. During Hawkins' tenure the company has faced weakening sales of its products, due to safety recalls and recession-linked job losses that have reduced the number of insured Americans able to purchase its devices.

Analysts will be looking for any sign of a potential rebound for devices, such as a slowdown in hospital cost-cutting or increase in medical procedures.

WHY IT MATTERS: Medtronic is considered a bellwether for the broader medical device industry, and the company's forecast of market growth in the low single-digits has hung over the entire sector, including competitors like Boston Scientific Corp and St. Jude Medical Inc.

"Medtronic management could provide an updated view of the overall medtech market growth — hopefully citing an uptick in procedure volumes in the last six weeks that could help offset ongoing price and reimbursement pressures," wrote Leerink Swann analyst Rick Wise, in a note to investors.

WHAT'S EXPECTED: Analysts polled by FactSet expect earnings per share of 84 cents on sales of $3.97 billion

LAST YEAR'S QUARTER: In the fiscal third-quarter 2010 the company earned adjusted profit of 77 cents per share on sales of $3.85 billion.

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