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For Immediate Release

Chicago, IL – January 26, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Medtronic (MDT), Edwards Lifesciences (EW), Boston Scientific (BSX), St Jude Medical (STJ) and CA Inc. (CA).

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Here are highlights from Wednesday’s Analyst Blog:

Medtronic Advances CoreValve Trial

Leading medical devices player, Medtronic (MDT) has taken one step forward in its CoreValve US pivotal trial with completion of enrollment in the extreme risk category of patients.

The company has also received approval from the US Food and Drug Administration (“FDA”) to continue enrolling extreme risk patients for further investigation under a Continued Access Study protocol. Medtronic is conducting another study with high risk patients, enrollment of which is scheduled for completion by year end.

The CoreValve trial in the US is studying Medtronic’s self-expanding CoreValve system in three sizes of 26mm, 29mm and 31 mm through three delivery routes – transfemoral, subclavian and directly through the aorta.

The CoreValve System is designed to replace diseased aortic valves without open-heart surgery. Globally, approximately 300,000 people have been diagnosed with this condition and roughly one-third of these patients are deemed at too high a risk for open-heart surgery.

The trial plans to enroll more than 1,500 patients, with two-thirds of patients in the high risk study. Patients in the extreme risk category are being evaluated against a performance goal while those in the high risk group are randomized equally to receive either transcatheter aortic valve implantation with the CoreValve System or to surgical aortic valve replacement.

Although Medtronic is working on getting the US approval for CoreValve, the device is already approved in Europe since 2007. During the most recent quarter, the company recorded robust growth in the Structural Heart portfolio driven by strong adoption of CoreValve in the international markets. The company is witnessing strong early adoption of the 31mm CoreValve that received CE Mark approval in July and anticipates receiving CE Mark approval for the 23 mm CoreValve in the second half of fiscal 2012.

Our Take

We are impressed with the company’s regulatory progress of CoreValve in the US market. However, Edwards Lifesciences (EW) has the first mover advantage in this region with FDA approval of Sapien clinched in November last year.

Over the last few quarters Medtronic reported weaker sales from its two largest segments – defibrillators and spinal implants. The challenges witnessed in the US ICD market have also been felt across the board and impacted Medtronic’s competitors, Boston Scientific (BSX) and St Jude Medical (STJ). To overcome these challenges, Medtronic is trying every means to revive growth. This includes penetration of international markets, portfolio expansion, focus on high-potential segments and restructuring initiatives. These should benefit the company over the long term.

Medtronic currently retains a Zacks #3 Rank (short-term Hold rating). We also maintain our long-term Neutral recommendation on the stock.

CA Delivers Impressive Quarter

CA Inc. (CA) reported third quarter 2012 adjusted earnings per share (EPS) of 60 cents, well ahead of the Zacks Consensus Estimate of 51 cents.

Revenue

Total revenue in the reported quarter came in at $1.26 billion, up 10.4% from $1.14 billion in the year-ago quarter. Around 8 percentage points of this growth was organic, while the remaining came from acquisitions. Moreover, the company also witnessed a $20.0 million upside in perpetual sales associated with Enterprise Solution products, including $10.0 million of products that were eligible for upfront recognition during the quarter.

Subscription and Maintenance revenue crept up 3.3% year over year to $1.00 billion. Professional Services revenue stood at $103.0 million, up 17.0% year over year. Software Fees and Other revenues shot up 87.8% to $154.0 million from $82.0 million a year ago.

North America generated revenues of $791.0 million, up 15.3% year over year while international revenue was $472 million, up 3.0% from the prior-year quarter.

Guidance

For fiscal 2012, the company expects total revenue of about $4.8 billion. GAAP diluted earnings per share growth is expected in the range of 11.0% to 13.0% in constant currency, compared with the previous outlook of 6.0% to 9.0%.  This translates to GAAP diluted earnings per share of $1.86 to $1.90.

Non-GAAP diluted earnings per share growth have been raised to a range of 11.0% to 13.0% in constant currency from the previous outlook of 7.0% to 10.0% for the full year. This translates to reported non-GAAP diluted earnings per share of $2.21 to $2.25.

Cash flow from operations is expected to be in the range of $1.44 billion to $1.47 billion for fiscal 2012.

Conclusion

CA Inc. posted decent third quarter results exceeding the earnings estimates. Revenue also improved on a year-over-year basis. However, the product demand trend was moderate in the reported quarter. We believe that the company provided conservative fiscal 2012 guidance.

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