Dec 1, 2004
Guidant Provides Mid-Quarter Update

Company Reiterates Guidance for the Fourth Quarter 2004, Full-Year 2004 and 2005

Indianapolis, Ind. - Guidant Corporation (NYSE: GDT) today provided a mid-quarter update reiterating financial guidance for the fourth quarter 2004 and full-year of 2004 and 2005.

Guidant reiterated guidance based on continued strength of the worldwide implantable defibrillator market, which has grown 25 percent through the first three quarters of the year. Guidant remains confident about the continued growth of the worldwide implantable defibrillator market and the company's performance within the market. Physician awareness and adoption of this lifesaving therapy continues to expand the market. Going forward, the upcoming publication of SCD-HeFT clinical trial results in a major, peer-reviewed journal and the implementation of a final Medicare defibrillator coverage ruling in early 2005 are projected to sustain market growth.

Guidant today also reiterated that it remains on track with its VISION-E(tm) drug eluting stent program with several important milestones scheduled to occur in the first quarter of 2005, including the SPIRIT III investigational device exemption filing and clinical trial commencement, as well as the initiation of the SPIRIT II clinical trial. Additionally, Guidant continues to pursue regulatory filings in Europe in line with its previously disclosed schedule.

The company indicated that it expects to hold a webcast before year-end to provide an update on its CEO succession plans.

Financial Guidance

Guidant reiterated fourth quarter and full year 2004 sales and earnings guidance of $925 - $965 million and $.63 - $.68 per share for the fourth quarter and $3.72 to $3.76 billion and $2.40 - $2.45 per share for the full year.

Related GAAP earnings per share guidance for the fourth quarter and full year are $0.63 - $0.68 and $2.03 - $2.08 per share, which includes the impact of in-process research and development charges (IPRD) of $0.24 per share incurred to date as well as the third quarter restructuring charge of $0.13 per share.

For the full-year 2005, the company continues to project sales of $3.9 - $4.1 billion and earnings per share of $2.52 - $2.67. Related GAAP earnings per share would be $2.29 - $2.54 and includes the impact of projected IPRD related to the achievement of product development milestones of $0.13 - $0.23 per share. 2005 sales and earnings will be weighted to the back half of 2005, similar to the trend in 2004, due to new product cycles occurring in second half of 2005.

Guidant provides earnings per share guidance on an adjusted basis from continuing operations because Guidant's management believes that the presentation provides useful information to investors. Among other things, it may assist investors in evaluating the company's operations period over period �' which is also the basis on which it generally is most reasonable to forecast results. This measure may exclude such items as business development activities (including IPRD at acquisition or upon attainment of milestones), strategic developments (including restructurings and product line changes), significant litigation, and changes in applicable laws and regulations (including significant accounting or tax matters, including the potential impact to net income of up to $80 million for the American Jobs Creation Act of 2004 not reflected above). Special items may be highly variable, difficult to predict, and of a size that sometimes has substantial impact on the company's reported operations for a period. The company continues to evaluate business development opportunities, which may generate additional IPRD charges in the balance of the year, and other special items may arise. Further, because the company provides guidance for continuing operations, guidance does not reflect matters classified as discontinued operations. As with guidance, the company provides historical net income and earnings per share on an adjusted basis. Management uses all of these measures internally for planning, forecasting and evaluating the performance of the business, including allocating resources and evaluating results relative to employee performance compensation targets. Investors should consider non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

Guidant Corporation

Guidant Corporation pioneers lifesaving technology, giving an opportunity for a better life today to millions of cardiac and vascular patients worldwide. The company, driven by a strong entrepreneurial culture of more than 12,000 employees, develops, manufactures and markets a broad array of products and services that enable less invasive care for some of life's most threatening medical conditions. For more information, visit www.guidant.com.

Forward Looking Statements

This release includes forward-looking statements concerning financial guidance. The statements are based on assumptions about many important factors, including market trends and competition, including sales growth rates for defibrillators and coronary stents sales trends in light of competitive product introductions; satisfactory clinical and regulatory progress, particularly with respect to clinical trials relating to DES and expanded indications and reimbursement for cardiac rhythm management products; any business development activities, including acquisitions that may result in IPRD; economic conditions, including exchange rates; litigation developments; and the factors listed on exhibit 99 to Guidant''s most recent 10-Q. As such, they involve risks that could cause actual results to differ materially. The company does not undertake to update its forward-looking statements.