The medical device maker says third-quarter earnings were up 1 percent, meeting expectations.
Medtronic Inc. is looking to a series of new products to stabilize its U.S. business, and CEO Omar Ishrak says he's optimistic.
As the Fridley-based company reported quarterly results Tuesday that were in line with Wall Street's expectations, Ishrak highlighted products like an MRI-safe pacemaker and a new drug-coated stent that won Food and Drug Administration approval last week.
"Innovation can drive growth even in the current market environment, both in the U.S. and around the world," he said on a conference call with analysts.
Medtronic said third-quarter earnings rose 1 percent to $935 million, or 88 cents a share, as revenue grew 2 percent to $3.92 billion. Excluding one-time items, earnings of 84 cents a share matched analysts' expectations as compiled by Bloomberg.
The company's shares fell 95 cents to close at $38.99.
Ishrak said two-thirds of the company's businesses are "performing very well," though that continues to be masked by difficulty in its spine and implantable cardioverter defibrillator (ICD) businesses.
Sales declines in those areas in the United States were deeper than analysts expected, although Ishrak said "declines in both of those businesses have stabilized to some degree."
Of greater reason for optimism is Medtronic's continued gains overseas -- and hoped-for new growth domestically, officials said.
Medtronic's international revenue of $1.77 billion was up 7 percent as reported or 6 percent on a constant currency basis. Emerging market revenue of $395 million increased 15 percent as reported or 16 percent on a constant currency basis.
Overall, international sales make up 45 percent of Medtronic's total, and Chief Financial Officer Gary Ellis said even greater overseas market gains are expected.
"A lot of the opportunity is because the penetration levels of our businesses are so much lower," overseas, Ellis said.
Fueling continued optimism for 2012 and 2013 is a pipeline of new products that has gained market share abroad and is expected to do the same in the United States, including the Revo MRI pacemaker, the Simplicity system for renal denervation and the CoreValve transcatheter valve.
On Friday, Medtronic announced FDA approval for the Resolute Integrity drug-coated stent. It is the only stent specifically approved for use in the treatment of coronary artery disease in people with diabetes.
On Monday, Dr. Jeff Chambers implanted two Resolute stents in patients at Mercy Hospital in Coon Rapids. He said the new stent will help Medtronic boost sales in a very competitive market.
"This will put them back in the game," he said.
Dr. Mike Mooney of Abbott Northwestern Hospital in Minneapolis, who participated in the clinical trials for Resolute, said the new stent "is much welcomed into the market. It is not unrealistic at all for them to gain real market share."
Analyst Lei Huang of Wells Fargo said Resolute could help Medtronic increase its drug-coated stent sales from $175 million in 2011 to $205 million in 2012.
James Walsh • 612-673-7428
Figures in millions except for earnings per share.