Medtronic cuts estimated medical device tax impact in half

Medtronic logo

Medical device maker Medtronic (NYSE:MDT) this week became the latest in a string of medtech giants who have pared back their expectations of the impact of the 2.3% medical device sales tax.

Medtronic chief financial officer Gary Ellis told investors during a conference call this morning that the medical device tax will likely cost the company around $20-$25 million for the 2013 fiscal year, about half what the company had previously projected.

The original $50 million estimate was calculated before the IRS released the final guidelines for the tax, Ellis said. The new rules protect medtech companies from paying the sales tax on existing inventories, meaning that there will be "a little bit of a slower ramp up on the device tax itself, just based on what the existing inventory levels that are out there for the various businesses," Ellis told investors.

The re-calculation puts Medtronic alongside fellow industry giants that have lowered their medtech estimates in recent weeks. Massachusetts rival Boston Scientific (NYSE:BSX) said earlier this month that its 2013 tax obligation will likely amount to around $75 million, down from prior estimates that but the tab closer to $100 million.

Orthopedics giant Zimmer Holdings (NYSE:ZMH) said as far back as October 2012 that the tax wouldn’t hit the company as hard as it had previously believed, similarly predicting a ramp-up over the course of 2013.

Medtronic released its lowered tax bill estimates alongside its 3rd-quarter financials, in which the company said profits were up 5.7% on sales growth of 2.8% for the 3 months ended Jan. 25. The company reported profits of $988 million, or 97¢ per share, on sales of $4.03 billion for the quarter. Adjusted to exclude 1-time items, earnings per share were 93¢, 2¢ ahead of expectations on The Street.

RSS From Medical Design & Outsourcing

  • Cyberdyne CEO has severed spines on his agenda
    Editor’s Note: This article is from Bloomberg.com‘s Natasha Khan. Cyberdyne Inc.’s CEO, Yoshiyuki Sankai, is researching ways to repair damaged body tissue. The 57-year-old scientist’s vision: to treat patients with spinal injuries by using stem-cell related technology to repair nerve connections and robotic suits that aid movement. Sankai’s company is setting its sights on better […]
  • Teknor Apex to showcase wide range of PVC compounds for medical devices at Medtec China
    Building on its international leadership role as a supplier of medical-grade PVC compounds, Teknor Apex Company has developed flexible and rigid formulations that address the special needs of device manufacturers. The company will highlight these capabilities at Medtec China 2015. “Teknor Apex produces or markets medical-grade PVC compounds in China, Singapore, Europe, and the United […]
  • The Raspberry Pi eco-system goes interstellar with the new Raspberry Pi Sense HAT
    Newark element14 has globally launched the latest addition to the expanding ecosystem of Raspberry Pi accessories, the Raspberry Pi Sense HAT, as featured in the ‘Astro Pi’ space mission. The Sense HAT will enable enthusiasts to control the same hardware used in space. The Sense HAT attaches to the Raspberry Pi board, and can be […]
  • CommScope completes acquisition of TE Connectivity’s Telecom
    CommScope Holding Company, has completed its previously announced acquisition of TE Connectivity’s Telecom, Enterprise and Wireless businesses, a leader in fiber optic connectivity for wireline and wireless networks. The all-cash transaction, valued at approximately $3 billion, strengthens CommScope’s position as a leading communications infrastructure provider with deeper resources to meet the world’s growing demand for network […]
  • SPI awards IKO Prosthetic Creative System the Student Design International Design Excellence Award
    SPI: The Plastics Industry Trade Association congratulated IKO Prosthetic Creative System for winning the SPI Student Design Award, part of the Industrial Designers Society of America’s (IDSA’s) International Design Excellence Awards (IDEA) program. The award was presented to IKO, an innovative, youth-focused prosthetic design company led by Chicago-based designer Carlos Torres, by SPI’s Senior Director of […]
  • New assay could revolutionize diagnosis and treatment of life-threatening disease
    Invasive Fungal Disease (IFD) is an emerging global health problem associated with high mortality rates in severely immunocompromised patients, such as those undergoing intensive chemotherapy or stem cell transplantation, and in patients suffering immune compromising conditions such as AIDS. The most common causative agents of this disease have been identified as Candida and Aspergillus species, […]
  • Molex delivers ISO 13485-compliant, medical-grade surgical cables from its class 100,000 clean room facility
    Molex, LLC operates a fully ISO 146441-1:1999 Class 8-certified clean room, satisfying strict particulate contamination levels specified by ISO-compliant requirements. Located in Thailand, the facility has less than 100,000 particulates (≥0.5µm) per cubic foot of air and manufactures a variety of ISO 13485-compliant medical cables and surgical cables used in operating theatres, hospitals, laboratories and […]
  • Swept-Source OCT: Patent license agreement between Massachusetts General Hospital and Heidelberg Engineering
    Heidelberg Engineering has entered into a patent license agreement with Massachusetts General Hospital (MGH) in Boston. The agreement grants global and exclusive rights to 77 basic patents and patent applications which relate to swept-source OCT technology and its application in ophthalmology. Spectral domain OCT has become indispensable to eye care professionals worldwide to diagnose and […]
  • MIT’s MultiFab presents a stark challenge to incumbent 3D Printer manufacturers’ hardware, software, and business Models
    MIT’s Computational Fabrication Group recently announced the MultiFab, a low-cost 3D printer that can combine up to 10 different resins in one part and also includes a 3D scanning system to identify and fix errors during production. According to Lux Research, these capabilities are rare in commercial 3D printers today due to the manufacturers’ need […]
  • AVX releases Accu-P MP medical grade film chip capacitors for medical devices
    AVX Corporation, a leading manufacturer of passive components and interconnect solutions, has released a new series of thin film chip capacitors specifically designed to meet the demanding performance specifications for implantable medical devices. Delivering extremely tight capacitive tolerances, exceptionally repeatable performance, and remarkably low ESR and high Q at high frequencies—including VHF, UHF, and RF […]
  • RIVANNA commences manufacturing of its Accuro device
    Rivanna Medical announced that it has begun manufacturing its FDA-cleared Accuro device, a handheld and untethered smart-phone-sized device that is designed to guide spinal anesthesia with automated 3D navigation technology in addition to ultrasound imaging of abdominal, musculoskeletal, cardiac and peripheral vascular anatomies. The product will be launched at the ASA annual meeting in San […]

Leave a Reply