Medtronic Inc. reported higher third-quarter profit Tuesday but its revenue missed forecasts due to weak U.S. sales of implantable heart devices and spinal products, and the company trimmed its annual profit outlook.
Shares of the world's largest medical device maker fell about 3 percent in morning trading.
Medtronic said its profit edged up 1 percent for the quarter that ended Jan. 27, but its sales of a variety of spine devices and of implantable cardioverter defibrillators fell. Cardioverter defibrillators are used to treat rapid heartbeats.
Medtronic said it earned $935 million, or 88 cents per share, up from $924 million, or 86 cents per share, a year earlier. Excluding one-time items it said it earned 84 cents per share. Its revenue rose 2 percent, to $3.92 billion from $3.86 billion.
Analysts expected Medtronic to report a profit of 84 cents per share and $4.01 billion in revenue, according to FactSet.
Medtronic said revenue from its heart and vascular device business grew 2 percent to $2.03 billion despite a decline in heart rhythm device sales. But ICD sales shrank 9 percent to $674 million because of a decline in surgical procedures in the U.S. Revenue from sales of pacemakers rose 3 percent to $467 million.
The company said sales of cardiovascular products grew 8 percent to $837 million on greater sales of stents that are used to treat aneurysms, and transcatheter heart valves.
Medtronic said revenue from its restorative therapies business rose 1 percent to $1.89 billion despite a slump in spinal sales. Revenue from those products fell 9 percent to $874 million, but sales of neuromodulation pain devices and diabetes and surgical products all increased.
The company also reported $112 million in revenue from its physio-control business, which makes heart monitors and external defibrillators. In November Medtronic agreed to sell that business to private equity firm Bain Capital for $487 million.
Medtronic said it now expects a profit of $3.44 to $3.47 per share for the fiscal year ending in April. That includes charges of 4 cents to 6 cents per share from Medtronic's buyout of blood pressure treatment maker Ardian Inc. about 10 cents per share in one-time tax benefits. The company still expects its revenue to grow 1 to 3 percent from fiscal 2011, which implies a total of $16.1 billion to $16.41 billion.
Medtronic previously forecast a profit of $3.43 to $3.50 per share. Analysts were expecting $3.37 per share on average.
Shares of Medtronic were down $1.20, or 3 percent, trading at $38.74 by midday. They have ranged from $30.10 to $43.33 the past year.