Medtronic narrows 2013 guidance

January 7, 2013 by Arezu Sarvestani

Medical device company Medtronic cuts off the lower end of its fiscal year 2013 earnings-per-share guidance in consideration of a federal R&D tax credit.

Medtronic logo

Medical device giant Medtronic(NYSE:MDT) narrowed its fiscal year 2013 guidance today, citing new clarity on the impact of the federal R&D tax credit.

The Minnesota device maker now expects earnings-per-share in the range of $3.66-$3.70 for fiscal year 2013, from previous guidance in the range of $3.62-$3.70, CEO Omar Ishrak told an audience at the J.P. Morgan Healthcare conference in San Francisco today.

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The new guidance cements the company's 2013 EPS growth prediction in the 6-7% range.

"This is purely mechanical," Ishrak said. "It's just removing the risk of the R&D tax credit, that's all this is."

Medtronic expects the credit to add about 3¢ per share in Q3 2013 and around another 1¢ in Q4 2013, he added.

In November the device maker announced its 2nd-quarter 2013 financial results, meeting expectations and raising its sales forecast for the rest of the year.

The Fridley, Minn.-based medical device company posted profits of $646 million, or 63¢ per share, on sales of $4.10 billion during the 3 months ended Oct. 26, representing a 25.8% profit slide on sales growth of 1.8%.

At the time Medtronic also boosted its sales outlook for fiscal 2013, saying it expected revenue growth of 3% to 4%, up from 2% to 4% previously.