Medtronic earnings plummeted in the third quarter as a result of $205 million in charges to close several plants, restructure operations and fund a foundation.
After charges, net income for the quarter ended Dec. 31 plunged 94% to $7.3 million, or 2 cents per fully diluted share, from $128.7 million, or 26 cents per share, in the year-ago quarter. The medical devices bellwether said revenues grew 5.4% to $631.4 million.
The bulk of the charges will be used to remedy poor financial performance in Minneapolis-based Medtronic's coronary stent and angioplasty catheter business units.
"Disappointing results from our vascular business necessitate aggressive action," said William George, chairman and chief executive officer.
Medtronic will close several factories and lay off 600 people worldwide.
For the nine months, net income fell 23% to $297.2 million, or 62 cents per fully diluted share, from $384.5 million, or 79 cents per share, in the year-ago period. Revenues rose 6.7% to $1.9 billion.
The 21-year-old foundation makes donations to support community programs in cities in which the company operates. One project, for example, encourages childrens' interest in science. The third-quarter charge will fund the foundation for about three years; Medtronic typically takes a charge to fund the foundation every few years.