Medtronic's Long Ball MDT, BSX

Medtronic upped guidance for revenue and diluted earnings per share. For fiscal 2007, the company confirmed revenue estimates of $12.5 to $13 billion. For fiscal 2008 estimates are now for $14 to $15 billion on the top line. The company's fiscal years end in April. At $13 billion, Medtronic's revenue would be about 15% better than the year just closed. Revenue for fiscal 2006 was $11.3 billion up 12% over the previous year. Earnings before taxes rose 25% to $3.2 billion.

The company's vascular, neurological, and spinal implant businesses did particularly well. The concern among investors that sales of implantable cardioverter defibrillators would slow down turned out not to be well-founded. Commenting on Medtronic's numbers to Reuters, one analyst summed it up, "The ICD number was at least in line with what everyone was expecting. Pacing was very strong. That's where Guidant was particularly weak after the recalls," said Jeff Jonas, portfolio manager with Gamco Medical Opportunities Fund. Guidant was recently purchased by Boston Scientific (BSX).

With all this information, the only missing piece is why Medtronic trades at just above $50 even after running up on strong earnings. The company has a 52-week high of $59.87 against a low of $47.80.

With numbers and forecasts like these, the stock should be higher.

Douglas A. McIntyre