Medtronic reported higher quarterly profit as demand for its spine, vascular and neurology products offset weak sales of its implantable devices to shock racing hearts back to normal rhythm.
The Minneapolis-based medical device maker posted a net profit of $710 million, or 61 cents a share, for its fiscal third quarter, compared with a profit of $670 million, or 55 cents a share, a year ago. Analysts on average expected 58 cents a share, according to Thomson Financial.
Third-quarter revenue rose 10% to about $3.05 billion. Sales of ICDs, Medtronic's largest product line, fell 2% to $711 million.
"The ICDs came in light. The stock is down after market because of it," said Jeff Jonas, a portfolio manager with Gamco Medical Opportunities Fund. "A lot of the other businesses picked up actually."
Revenue in the overall Cardiac Rhythm Disease Management business, which also includes pacemakers, rose 2% to $1.29 billion.
Spinal revenue rose 12%, and revenue from vascular products including stents to treat clogged arteries increased 29%. Neurological revenue rose 17% and diabetes increased 24%.
Medtronic shares fell about 7% in 2006, lagging well behind the S&P 500 Index, which rose more than 13% last year.