WASHINGTON DC, United States

MEDTRONIC Inc, the world’s largest medical device maker, reported higher-than-expected earnings yesterday as sales of newer devices helped make up for an ongoing slump in its best-selling heart and spine implants.

For more than a year, Medtronic has reported weaker sales of its two leading franchises, heart defibrillators and spinal implants, which account for about 40 per cent of total sales. Tighter hospital budgets, reduced procedures and safety concerns have led doctors to implant fewer devices. Those trends continued in the most recent period, with combined sales of the devices falling five per cent.

But overall revenue rose three per cent in the second fiscal quarter to US$4.13 billion ($355.8 billion), helped by sales of heart valves, stents and other upgraded products, the company reported.

International sales rose six per cent to US$1.83 billion, accounting for 44 per cent of total sales for the quarter.

“I was pleased to see the strong performances in many of our businesses, as our new products are taking share and protecting pricing,” said Chief Executive Omar Ishrak. Those products include the company’s Revo pacemaker, the first device of its kind that can be used with an MRI scanner, and the Resolute drug-eluting stent, a next-generation device used to prop open arteries.

For the most recent quarter, the company reported net income of US$871 million, or 82 cents per share, compared with US$566 million, or

52 cents per share, a year ago.

Results in the year-ago period were weighed down by a massive legal settlement related to defective

heart defibrillators.

Excluding one-time expenses, the company would have earned US$898 million, or 84 cents per share, in the most recent period.

Those results topped analyst expectations for earnings of 82 cents per share on revenue of US$4.07 billion. Analysts had speculated Medtronic might scale back its full-year revenue guidance, but the company said it still expects earnings of between US$3.43 and US$3.50 per share for fiscal 2012.

Medtronic shares rose US$1.23,

or 3.7 per cent, to US$34.50 in

midday trading.

Revenue in Medtronic’s portfolio of cardiovascular devices increased one per cent to US$2.21 billion, with sales of pacemakers and heart valves making up for weaker sales of implantable heart defibrillators. Revenue from those heart-zapping devices, used to treat heart failure, fell eight per cent to US$708 million. Medtronic and other device makers have seen profits drop since the Department of Justice began investigating alleged overuse of defibrillators in January.

The company reported eight per cent higher sales of its drug-eluting stents with revenue of US$830 million. Medtronic said its share of the global market for the devices increased to roughly 19 per cent, aided by the launch of Resolute in Europe and other international markets. US approval is expected in 2012.

Revenue from the company’s spine business fell three per cent to US$839 million. In June, that business took a major publicity blow after a medical journal alleged that the company downplayed the risks of its InFuse spinal repair protein. The implant, which is approved to treat degenerative spinal disk disease, had sales of approximately US$800 million in the last fiscal year. But Medtronic said yesterday sales declined 16 per cent in the last quarter.

Medtronic said sales of diabetes treatments and surgical tools helped offset weak spinal sales.