Medtronic Inc. (NYSE:MDT) posted net earnings of $868 million on sales of $3.84 billion during the second quarter, compared with net earnings of $547 million in $3.57 billion in sales during the same period last year.

Outside the U.S., sales grew 12 percent to $1.54 billion, or 40 percent of total revenues.

The Minneapolis-based medical device monolith said its Q2 2010 results for the three months ended Oct. 30 were strong enough for it to upgrade its earnings guidance for the full year. Medtronic said it expects diluted earnings-per-share of between $3.17 and $3.22 for fiscal 2010, up from its previous forecast of $3.10 to $3.20.

Full-year revenues are expected to grow 5 percent to 8 percent “for the foreseeable future,” the company said.

A pair of accounting adjustments pared net earnings growth back to 12 percent, or $850 million, for the quarter. The first adjustment was a $44 million after-tax gain from its settlement with Saugus, Mass.-based W.L. Gore & Associates over patents covering self‐expanding medical devices that use a metal alloy like nitinol that expands to its original shape after deployment.

The second adjustment related to new accounting standards for reporting convertible debt and led to an after-tax charge of $26 million during the fiscal 2010 second quarter.

Medtronic’s Physio-Control division paced the company’s sales growth with a 25 percent surge, rising to $94 million for the quarter on strong international sales and the Lifepak 15 defibrillator the company launched earlier during the fiscal year. Its cardiovascular business posted sales of $696 million, up 17 percent over Q2 2009.

Neuromodulation sales grew 12 percent to $384 million during Q2 2010, driven by strong sales of Medtronic’s Activa PC and RC deep brain stimulation systems and its InterStim urinary and bowel incontinence therapy. Surgical technologies revenues reached $224 million, up 5 percent, while spinal segment sales rose 4 percent to $862 million. Medtronic’s cardiac rhythm disease management business posted sales of $1.278 billion, up 3 percent.