Medical device maker Medtronic Plc on Tuesday reported quarterly revenue fell short of analysts’ estimates, hurt by lower sales in its diabetes-related device business.
Shares of the company fell 2.7 percent to $81.24 in premarket trading.
Sales in Medtronic’s diabetes business, which sells artificial pancreases, glucose sensors, and insulin pumps, fell about 1 percent to $449 million in the first quarter ended July 28. Sales, which were hurt by a temporary supply issue related to the company’s glucose monitor sensors, lagged Wall Street analysts’ average estimate of $471.3 million, according to BMO Capital Markets.
Dublin-based Medtronic also maintained its full-year earnings and revenue forecasts, unlike its peers Boston Scientific Corp and Edwards Lifesciences Corp, which lifted full-year expectations last month.
Medtronic said it 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 sales in the company’s heart device and restorative therapies businesses, which together make up some 60 percent of total revenue, also missed analysts’ average expectations, BMO Capital said.
Medtronic said a previously disclosed IT disruption that had affected manufacturing processes and customer ordering had “some impact” on quarterly performance, but was not material to earnings or revenue.
“FY 2018 is off to a slow start but not a surprise following MDT’s July disclosure regarding IT headwinds and lower diabetes sales,” BMO Capital analyst Joanne Wuensch said in a client report.
Net income attributable to Medtronic rose 9.4 percent to $1.02 billion or 74 cents per share in the first quarter.
Excluding one-time items, the company earned $1.12 per share, beating analysts’ expectations by 4 cents, according to Thomson Reuters I/B/E/S.
Revenue climbed 3.1 percent to $7.39 billion, but missed analysts’ estimates of $7.45 billion.
(Reporting by Akankshita Mukhopadyay and Tamara Mathias in Bengaluru; Editing by Sai Sachin Ravikumar)