Medtronic 3Q net $571M, but 3Q law expenses $266M

Bloomberg reported Medtronics net income dropped to $571 million, or 51 cents a share, in the quarter [Q3, 2008], from $666 million, or 58 cents, a year earlier, the Minneapolis company said today in a statement. Profit excluding litigation expenses and other items was 67 cents a share, missing analysts' estimates by four cents.

Medtronic's $266 million legal charges in the quarter, which ended Oct. 24, included $229 million in a heart stent patent lawsuit with Johnson & Johnson and $37 million to settle a spinal screw patent case with Fastenetix LLC. Medtronic also faced increasing competition for its top-selling heart defibrillators from Boston Scientific Corp. and St. Jude Medical Inc.

"It has been a tough few months for Medtronic,'' said Michael Weinstein, a JPMorgan Chase & Co. analyst in New York, in a note to clients last week that lowered sales estimates. "If Street revenue forecasts are too high (both with and without currency), then it's going to make it hard for the stock to work.''