* CEO: Q2 was disappointing, but mainly due to temporary factors
* Qtrly revenue $7.35 bln vs. est. $7.46 bln
* Co cuts adj. earnings forecast for fiscal 2017
* Shares fall more than 9 pct (Adds conf call details; updates shares)
Nov 22 (Reuters) - Medtronic Plc reported weaker-than-expected quarterly revenue driven by slower growth in its diabetes and heart product units, prompting the company to cut its adjusted earnings forecast for fiscal 2017.
Shares of the world’s No. 1 standalone medical device maker fell about 9 percent to $73.14 on Tuesday, and Chief Executive Omar Ishrak emphasized that the “disappointing” quarter was largely affected by temporary factors.
Revenue at Medtronic's diabetes unit rose 3 percent to $462 million in the second quarter ended Oct. 28. (bit.ly/2gFRNT8)
However, the company said growth was hurt by the timing between approval and shipments for its MiniMed 630G device, and the early approval of its “artificial pancreas” device called MiniMed 670G.
MiniMed 670G - the first device that allows a glucose sensor to communicate with an insulin pump and automatically regulate insulin flow - was approved by the U.S. Food and Drug Administration in September and is expected to launch in spring 2017.
Sales in Medtronic’s cardiac and vascular unit, which includes defibrillators, pacemakers, heart valves and stents, were $2.58 billion in the quarter, below analysts’ average estimate of $2.64 billion, compiled by Evercore ISI.
The company highlighted certain negative trends that are expected to persist, including an impact to UK revenue due to limits imposed by National Health Service on bulk purchases, and weaker growth in the Middle East as governments deal with a higher deficit thanks to falling oil prices.
However, Ishrak said on a conference call that new launches, including 15 surgical products and MiniMed 670G “will give us enough growth to take us well within the mid single-digit range” in terms of fiscal 2017 revenue.
Medtronic cut its adjusted earnings forecast to a range of $4.55-$4.60 per share from $4.60-$4.70 for the fiscal year ending April 28, 2017.
It also lowered its revenue growth to be within the mid-single-digit range on a constant currency basis, from the upper half of the mid-single-digit range.
Improvement in the back half of the year is essential particularly in the context of potential Obamacare turbulence, Cowen & Co analysts said, adding that they remained optimistic the company would rebound from the deceleration.
Medtronic’s revenue rose 4 percent to $7.35 billion, missing the average analysts’ estimate of $7.46 billion, according to Thomson Reuters I/B/E/S.
Excluding items, the company earned $1.12 per share, beating the average analyst estimate by one cent, benefiting from higher operating margins. (Reporting by Akankshita Mukhopadhyay and Natalie Grover in Bengaluru; Editing by Anil D‘Silva and Martina D‘Couto)