(Reuters) - Medical device maker Medtronic Plc on Tuesday reported quarterly revenue that fell short of Wall Street estimates, hurt by lower sales in its diabetes unit and weak demand for its spine-related products.
Shares of the Dublin-based company, which makes heart devices, spinal implants and insulin pumps, dipped as much as 3 percent to $81.00 in morning trading.
Medtronic’s spine devices business, which Sales in Medtronic’s diabetes business, which includes artificial pancreas devices and insulin pumps, fell about 1 percent to $449 million in the first quarter ended July 28, lagging analysts’ average estimate of $471.3 million, according to BMO Capital Markets. The company said limited supplies of its glucose monitor sensors weighed on sales.makes up about 9 percent of total revenue, generated sales of $649 million, but that result also fell well short of analyst forecasts.
Analysts said the company’s challenges were temporary, having been exacerbated by an IT disruption it faced in June.
“This was a mixed quarter for Medtronic, although it was not entirely unexpected ... it had no impact on our long-term outlook,” Edward Jones analyst John Boylan said.
The IT disruption affected Medtronic’s customer ordering, distribution and manufacturing processes in the quarter, but the company said the issue had not significantly impacted earnings or revenue.
Cowen & Co analyst Joshua Jennings said the company’s April sale of its medical supplies business to Cardinal Health Inc “should kickstart top-line and margin engines.”
Medtronic maintained its full-year earnings and revenue forecasts, in contrast to its peers Boston Scientific Corp and Edwards Lifesciences Corp, which both lifted full-year expectations last month.
Medtronic expects adjusted earnings per share to increase 9 percent to 10 percent and revenue to rise 4 percent to 5 percent on a constant-currency basis in the year ending April 2018.
First-quarter revenue rose 3.1 percent to $7.39 billion, but missed analysts’ estimates of $7.45 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to Medtronic rose 9.4 percent to $1.02 billion or 74 cents per share. Excluding one-time items, the company earned $1.12 per share, beating analysts’ expectations by 4 cents.
Shares of Medtronic, which have risen 15 percent this year, were down 1.7 percent at $82.07 in midday trading.
Reporting by Akankshita Mukhopadyay and Tamara Mathias in Bengaluru; Editing by Sai Sachin Ravikumar