* Reiterates adjusted EPS target of $3.10 to $3.20
* Repeats fiscal 2010 revenue outlook of 5-8 pct growth
* Says industry growing in low to mid-single digits (Adds details from analyst day, byline)
By Debra Sherman and Susan Kelly
MINNEAPOLIS/CHICAGO, June 2 (Reuters) - Medtronic Inc (MDT.N), the world’s largest stand-alone medical device maker, on Tuesday said it expects to preserve and expand its share in markets ranging from pacemakers and defibrillators to stents and spinal devices.
“Our goal is to protect and grow our leadership position in all of our markets,” Medtronic Chief Executive William Hawkins said at an analyst day at the company’s Minneapolis headquarters.
Company executives confirmed a fiscal 2010 revenue growth target of 5 percent to 8 percent on a constant-currency basis, noting the forecast assumes stable market share. That compares with low to mid-single-digit growth in the medical technology industry overall this year.
Executives also reiterated an earnings forecast of $3.10 to $3.20 per share for 2010, implying a profit growth rate in the range of 9 percent to 12 percent. Management said it would employ share buybacks, operating margin improvements and tax strategies to back its growth pledge.
Shares of Medtronic, which disappointed investors two weeks ago with a revenue outlook many analysts viewed as too conservative, ended 2.66 percent higher at $35.83, after hitting a six-month high on the New York Stock Exchange.
Hawkins said the company’s priorities remain sustainable long-term growth through innovation, improved operating margins, disciplined capital allocation and alignment of the organization for execution.
“Our current focus is on driving internal growth supported by strategic technology acquisitions that leverage our global footprint,” he said.
The company said it plans to fund research and development spending at roughly 10 percent of annual revenue.
Hawkins said Medtronic’s business has held up well even as its hospital customers found access to capital difficult and more people put off doctor visits and elective procedures due to unemployment and loss of health insurance. He predicted Medtronic would remain resilient in a new environment marked by healthcare reform but said there would be challenges.
“The questions around tax reform and the uncertainty around healthcare reform have weighed heavily on our industry and on Medtronic,” he said.
Medtronic, which controls roughly half of the global market for implanted heart defibrillators and pacemakers, lost market share after the 2007 recall of its Fidelis lead, which connects the devices to the heart.
In an interview, Pat Mackin, president of Medtronic’s cardiac rhythm disease management business, said two upcoming product launches would help the company recover market share.
The first is a pacemaker that can safely withstand an MRI scan, due out in fiscal 2010, and the other is a defibrillator that minimizes inappropriate shocks, expected in fiscal 2011.
Results of a study called MADIT-CRT due soon from rival Boston Scientific Corp (BSX.N) could reinvigorate the overall defibrillator market, boosting growth, which has been flat, to a mid-single-digit rate, Mackin told Reuters.
The company highlighted a number of potential growth drivers in its arsenal, ranging from the recent Endeavor stent launch in Japan and transcatheter heart valves expected in 2014 to an insulin pump launching now in Europe that can automatically suspend delivery if it detects a diabetic’s blood sugar has dropped too low.
In its spinal business, also facing market share pressures amid a government probe into off-label use of its Infuse bone graft product, Medtronic said it is aiming to return to market growth rates by 2012 as it refreshes its product line. (Editing by Gunna Dickson and Steve Orlofsky)