(Reuters) - Medical device maker Medtronic Plc warned of a significant hit to current-quarter sales on Thursday as Americans are forced to delay less urgent surgeries because of the COVID-19 pandemic, sending its shares down 2%.
Medical device makers have borne the brunt of the coronavirus outbreak as federal and state guidelines ask for elective surgeries such as hip and knee replacements and certain heart procedures to be delayed, sapping the demand for devices used in the surgeries.
The company expects a slow recovery in its restorative therapies unit, which houses neuro-stimulation implants to treat chronic pain, and heart device unit, which sells valves.
“We currently expect first quarter revenue growth to be modestly worse than the fourth quarter,” said Chief Financial Officer Karen Parkhill.
However, the world’s largest standalone medical device maker added that it was seeing early signs of a recovery in some parts of the world and expects a return to more normal revenue growth by the end of fiscal year 2021.
Medtronic said sales of products that are more urgently needed by patients, such as pacemakers used to control abnormal heart rhythms, have started to recover.
Revenue across the company’s segments fell in the fourth quarter, with its heart devices unit taking the biggest hit as customers lowered bulk purchases.
Sales in the unit fell 34.3% to $2 billion in the quarter, while net sales declined 26.4% to $6 billion, missing estimates of $6.17 billion.
Medtronic did not give a forecast for full-year 2021, citing uncertainties surrounding the coronavirus outbreak, but said the company had ample liquidity and increased its quarterly dividend by 7.4% to 58 cents per share.
Excluding items, Medtronic earned 58 cents per share, missing analysts’ expectations of 68 cents.
Reporting by Trisha Roy and Manas Mishra in Bengaluru; Editing by Amy Caren Daniel