Medtronic’s CRM and spine units continue to struggle, layoffs ahead

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Medtronic’s (NYSE:MDT) bellwether 4th quarter and full-year earnings noted a continued decline in U.S. cardiac rhythm management and spinal products, but the slump may be slowing, the company said.

The device giant’s U.S. implantable cardioverter defibrillator sales slid 2% during the quarter, but that’s a marked improvement from the 14% decline reported during the same period last year, CEO Omar Ishrak said in a conference call with investors today.

Medtronic’s spinal division suffered on sinking sales for the controversial Infuse bone growth protein, which declined 26% during the quarter.

Together the CRM and spinal divisions made up a 10% decline for the year ended April 27, but Ishrak remains optimistic.

"While both of these business had unique factors affecting their performance, both were showing some signs of stabilization as we exited the year," he told investors today.

Medtronic marked a decline in U.S. customer inventory levels for its CRM products, but the implant rate showed year over year growth for the first time in 6 quarters, Ishrak said.

That may be good news for the clutch of medical device makers bearing the brunt of the ongoing CRM slump.  Boston Scientific (NYSE:BSX) reported a 10% decline in its CRM sales during its 1st quarter, and rival St. Jude Medical (NYSE:STJ) noted a 4% slide in its CRM sales during the 3 months ended March 31.

In conjunction with its earnings report, Medtronic announced plans to lay off about 1,000 workers globally, including 220 from its CRM business that the company initially announced earlier this month. The remaining 780 positions weren’t defined publicly.

"We are eliminating about 1,000 positions around the company and around the globe," chief financial officer Gary Ellis told theTwin Cities Pioneer Press. "It’s kind of the normal, ongoing thing that goes forward as we shift resources from slower-growing markets to faster-growing markets."

MDT shares rose breifly in early morning trading, opening 0.7% higher at $37.97 before settling down and sinking 1.5% to $37.15 by about 1 p.m. today.

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