I haven't been a fan of Medtronic (NYSE:MDT) for a while now, but even I didn't see this one coming.

This huge developer of pacemakers, ICDs, stents, spinal products, and a host of other devices surprised the Street by trimming its revenue and earnings guidance for this quarter. For a generally reliable stock like Medtronic, which often trades at a premium because of its perceived strength and stability, it was a shot heard 'round the medical-device world.

The culprit this quarter was ICD sales, which will fall about 6%. That news rattled investors in rivals Boston Scientific (NYSE:BSX) and St. Jude (NYSE:STJ); some readers may find that strange, particularly in St. Jude's case. After all, St. Jude posted growth in ICD sales in the last quarter -- doesn't that mean it's gaining more share? Recall that Medtronic's quarters are out of sync with most of the rest of the industry. What's more, it reported that results got especially bad in July, a month not captured in St. Jude's last report.

This news also muted what was otherwise good news for the entire sector. The government revised and reduced its proposed Medicare reimbursement cuts for many medical devices. Though no one really thought that ICD rates would get cut 20%, or that drug-eluting stents would get cut 25% or more, the revisions turned out to be pretty decent -- down about 3% for ICDs, down a bit more than 3% for stents, and actually up for some devices like pacemakers and spine products.

While that's good news for companies ranging from Abbott Labs (NYSE:ABT) to Zimmer (NYSE:ZMH), it wasn't without some casualties. Rural hospital operators like Triad (NYSE:TRI) and HMA (NYSE:HMA) had been hoping for better payments, but those were cut from a nearly 7% increase to a bit less than 4%. In that business, those few percentage points matter.

If this disappointment dispels some of the perceived invulnerability of Medtronic and improves its valuation, so much the better. My issues have always been with Medtronic's share price, not the underlying company. In the meantime, while the going may be tougher now in the ICD space, it's still an attractive long-term opportunity, and investors may want to start looking around for bargains.

Further Foolish medical missives:

Is your portfolio flatlining? Great stock ideas from our Foolish newsletters can help spark it back to life. Give any of our premium investing newsletter services a try free for 30 days.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).