UPDATE 3-Medtronic quarterly net declines on charges

* EPS excluding items tops Wall St view by 1 cent

* Net profit down 38 pct on legal, restructuring items

* Implantable defibrillator revenue up 1 pct

* Backs full-year EPS goal of $3.10-$3.20 excluding items

* Shares fall 1 percent in morning trading (Recasts, adds details from conference call, analyst comments, byline)

By Susan Kelly

CHICAGO, Aug 25 (Reuters) - Medical device maker Medtronic Inc (MDT.N) said quarterly net earnings fell 38 percent due to restructuring and legal charges, but operating earnings were slightly higher than expected.

An additional selling week in the quarter compared with a year earlier helped boost revenue 6 percent.

"Because of the extra selling week, the results become a little hard to put in the right context. Medtronic has been a story with a lot of uncertainty around growth and leverage, and a quarter with that extra selling week doesn't really clear up much," said Thomas Weisel Partners analyst Raj Denhoy.

Analysts said that despite confusion about extra selling days, sales in key divisions, including cardiac rhythm management, diabetes and spine, appeared largely in line with expectations.

Medtronic on Tuesday said net income for its fiscal first quarter, ended July 31, fell to $445 million, or 40 cents a share, from $723 million, or 64 cents a share, a year earlier. The latest results included costs for a previously announced workforce reduction of about 1,500 jobs and for settling a stent patent dispute with rival Abbott Laboratories Inc (ABT.N).

Excluding special items, Medtronic earned $883 million, or 79 cents a share. Analysts on average had forecast 78 cents a share, according to Reuters Estimates.

Revenue rose 6 percent to $3.93 billion.

Revenue from implantable cardioverter defibrillators (ICDs), which manage rapid heart rhythms, rose 1 percent to $775 million. Minneapolis-based Medtronic is the largest maker of ICDs, with about half of the market for the devices that save lives by shocking a racing heartbeat back to normal rhythm.

Overall revenue in the company's Cardiac Rhythm Disease Management division, which includes ICDs and pacemakers, increased nearly 3 percent to $1.34 billion.

The company said its share of the heart rhythm market, where it competes with St Jude Medical Inc (STJ.N) and Boston Scientific Corp (BSX.N), remained stable. It had lost market share in the past few years due to product recalls, but the trend has stabilized in recent quarters.

"We think we're moving in the right direction on ICDs," said Medtronic Chief Executive Bill Hawkins.

The ICD market grew in the mid-single digits in the latest quarter, with demand for heart devices remaining relatively impervious to the weak economy, Medtronic said.

"Results lend credence to management's commentary around maintaining share or faster market growth," Morgan Stanley analyst David Lewis said in a note to clients.

In spinal products, revenue grew 7 percent to $915 million. Revenue from cardiovascular products, including stents to treat clogged arteries, rose 9 percent to $689 million.

Revenue from neurological devices that treat pain and other conditions rose 7 percent to $373 million, and diabetes product revenue was up 10 percent to $295 million.

Medtronic reiterated its revenue and profit outlook for the full fiscal year, forecasting earnings per share of $3.10 to $3.20 excluding special items, and revenue up 5 percent to 8 percent on a constant-currency basis.

Medtronic shares fell 1 percent to $37.62 in morning trading on the New York Stock Exchange. (Reporting by Susan Kelly; Editing by Derek Caney, Maureen Bavdek and John Wallace)