Medtronic’s product offerings could reverse plateauing sales

Medtronic ended its fiscal year with nominal sales growth and a sharp decline in profits, but analysts covering the medical device company believe it will benefit from a windfall thanks to its strong lineup of upcoming products.

During a conference call with analysts on Thursday, Medtronic CEO Geoff Martha highlighted several recent U.S. Food and Drug Administration (FDA) approvals, including a new system for the treatment of atrial fibrillation (AFib). That device — PulseSelect — received FDA approval in December, marking the first U.S. approval for pulsed field ablation (PFA) technology.

“It’s a good start,” Martha said, noting that PFA is a growth area.

Doctors could use PulseSelect in a minimally invasive procedure to pulse electric fields that insulate the pulmonary veins to treat AFib, an irregular heartbeat that can impede blood flow. Traditional ablation treatment for AFib heats or cools the atrial tissue and may cause more damage to the surrounding anatomy. According to Medtronic, more than 6 million Americans suffer from AFib. Product development began in 2006.

John Boylan, senior equity analyst at Edward Jones in St. Louis, said he sees a lot of promise in Medtronic’s product lineup, including PulseSelect.

“We believe they are in good shape over the long term,” Boylan said, adding in his written research notes, “overall, we believe Medtronic has a solid pipeline of new products that includes cardiac repair products, antidiabetic products, continuous bringing surgical robots to market outside the U.S. and other new devices.”

Medtronic – based in Ireland but with operational headquarters in Fridley – reported Thursday fourth-quarter and fiscal year-end earnings on April 26 of $659 million, down nearly 50% from a year earlier. Boylan said currency losses were among the factors that hurt overall revenues – $8.6 billion, just a slight increase from the previous year – as Medtronic reported a negative impact of $75 million in the quarter .

Medtronic’s diabetes division saw sales growth of almost 11%, the largest increase of any of the company’s business lines. However, sales of the structural heart and aorta division fell by more than 20%. Previously, the company’s sales growth remained largely unchanged throughout the year, with Medtronic reporting sales growth of approximately 5% in the first three quarters of the year.

Some of Medtronic’s competitors are seeing greater sales growth. Last month, medical device maker Boston Scientific Corp. recorded sales growth in the first quarter by 13.8%.

Medtronic shares fell more than 5% after Thursday’s trading.