It wasn't one major problem that led Medtronic to fall short of expectations, but a series of smaller gaffes. Sales of InFuse, which promotes bone growth, were hurt by a Department of Justice investigation into off-label marketing for spinal surgeries, which it's not approved for. Off-label use can create problems, as both Medtronic and Stryker
Further, Boston Scientific's
On the bottom line, Medtronic had to take a couple of charges, one bad and one that's not as big a problem. Medtronic lost its case in a lawsuit with Johnson & Johnson
Besides the charge for the product write-off and a charge for the acquisition of CryoCath Technologies, Medtronic didn't lower its earnings forecast for its fiscal year. Normally that would be a good sign, but the company didn't perform up to its high standards in the most recent quarter, so investors have to wonder whether that's more hope than guidance. In either case, at least the sagging economy should affect Medtronic's performance in the second half.
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