Medtronic hit hard on Q1 results

Blaming the economic slowdown and increased pricing pressures, Medtronic (NYSE: MDT) has reassessed its projected growth for fiscal year 2011. And that spooked investors, sending the device company's stock down as much as 10 percent.

Medtronic had anticipated earnings per share between $3.45 and $3.55 and revenue growth between 5 percent and 8 percent (the devicemaker's fiscal year ends in April 2011). But a dip in first quarter revenues, unfavorable foreign currency impact and overall slow sales has caused the company to adjust that projection. Now Medtronic expects EPS of $3.40 and $3.48, with revenue growing between 2 percent and 5 percent, according to Seeking Alpha.

The company reported first quarter revenue of just under $3.8 billion, compared with the $3.9 billion reported in the first quarter of fiscal year 2010, a decrease of 4 percent as reported or an increase of 2 percent after adjusting for a $21 million unfavorable foreign currency impact and approximately $200 million of revenue benefit for the extra week in the first quarter of fiscal year 2010, the company says in a statement. First quarter net earnings were $830 million, or $0.76 per diluted share, an increase of 87 percent and 90 percent, respectively, over the same period in the prior year. 

"A softer global healthcare market impacted by decreased utilization and increased pricing pressure made for a difficult first quarter," says Bill Hawkins, Medtronic chairman and CEO. "Solid performance from the CardioVascular, Diabetes and Surgical Technologies businesses was offset by softness in other businesses." Hawkins also notes that while the company experienced a slowdown in the markets of its largest businesses, it is making investments in emerging markets and therapies that will boost its long-term prospects.

- see Medtronic's release
- read the story from BusinessWeek 
- here's the SeekingAlpha article