Guidant Earnings Drop 32 Percent
INDIANAPOLIS (AP) _ Guidant Corp. on Thursday reported a nearly 32 percent drop in fourth-quarter earnings driven in part by one-time charges that offset strong sales of heart defibrillators.
But the Indianapolis-based medical device maker’s performance beat Wall Street expectations, and its shares rose 3 percent in midday trading. The stock has been hurt by Guidant’s recent troubles in the emerging market for drug-coated stents, which are inserted into coronary arteries to prop them open after surgery.
Guidant reported net income for the October-December period of $92.4 million, or 31 cents a share, on sales of $896 million. That compared with earnings in the year-ago period of $135 million, or 44 cents per share, on net sales of $719 million.
The performance was hurt by $107 million in one-time charges, including $61 million related to Guidant’s Jan. 3 announcement that it was abandoning a plan to acquire rival Cook Group Inc. for $3 billion.
Excluding one-time items, Guidant earned $199 million in the fourth quarter, or 65 cents a share, beating the estimate of analysts surveyed by Thomson First Call by 4 cents.
Guidant shares were trading at $34.02 at midday on the New York Stock Exchange, up $1.11 for the day.
For all of 2002, Guidant reported net income of $612 million, or $2 per share, compared with 2001 earnings of $484 million, or $1.58 per share.
Domestic sales of implantable defibrillators grew 68 percent in the fourth quarter. Pacemaker sales grew 9 percent.
Ron Dollens, Guidant’s president and chief executive, said sales growth for those products would offset the erosion of the company’s domestic stent business from the introduction of next-generation drug-coated stents.
Those devices are coated with medicines to prevent arteries from closing with scar tissue after artery-clearing surgery.
Rivals Johnson & Johnson and Boston Scientific Corp. are expected to introduce drug-coated stents to the U.S. market this year, beating Guidant by at least two years.
Guidant had hoped its plan announced last summer to acquire Bloomington-based Cook would give it an edge. But Guidant dropped its plan, citing disappointing results in clinical trials of a stent.
On the Net:
Guidant Corp.: http://www.guidant.com