Medtronic (NYSE:MDT) posted fiscal 1st-quarter sales and earnings today that beat the consensus forecast on Wall Street, despite a bottom-line slide, as its mega-merger with Covidien continues to bear fruit.
Fridley, Minn.-based Medtronic reported profits of $820 million, or 57¢ per share, on sales of $7.27 billion for the 3 months ended July 31, representing a -5.9% profit slide on sales growth of 70.2% compared with the same quarter last year, which was shorter by 1 week.
Adjusted to exclude 1-time items, including $226 million in an inventory step-up and $481 million in amortization, earnings per share were $1.02, a penny ahead of The Street, where analysts were looking for sales of $7.06 billion.
“Our 1st-quarter results represent a strong start to fiscal year 2016, with all 4 of our groups contributing to revenue growth that was at the upper end of our goal when adjusted for the extra week. We are driving solid growth in the United States and seeing broad acceptance of our innovative therapies around the world,” chairman & CEO Omar Ishrak said in prepared remarks. “We continue to strengthen and geographically diversify our businesses and remain confident in both our outlook for the remainder of the year and our long-term competitive position in the changing healthcare environment.”
Medtronic reiterated its outlook for the rest of fiscal 2016, saying it still expects to report EPS of $4.30 to $4.40 on constant-currency sales growth of 4% to 6%.
MDT shares closed up 2.9% at $71.52 apiece yesterday and gained another 0.7% in after-hours trading, rising to $72 per share as of 7:20 p.m. Eastern.
Medtronic said the strong dollar put a $529 million hit on the top line. U.S. sales were up 78% to $4.14 billion; sales in developed markets outside the U.S. grew 58% to $2.20 billion, and emerging market sales were $935 million, up 71%, the company said.
Here’s a look at the sales breakdown along Medtronic’s business segments:
- Cardiac & Vascular Group: $2.57 billion (+14%)
- Cardiac Rhythm & Heart Failure: $1.37 billion (+9%)
- Coronary & Structural Heart: $788 million (+3%)
- Aortic & Peripheral Vascular: $410 million (+77%)
- Minimally Invasive Therapies Group: $2.46 billion (not calculable)
- Surgical Solutions: $1.35 billion (nc)
- Patient Monitoring & Recovery: $1.10 billion (nc)
- Restorative Therapies Group: $1.81 billion (+13%)
- Spine: $763 million (+3%)
- Neuromodulation: $485 million (+1%)
- Surgical Technologies: $420 million (+10%)
- Neurovascular: $138 million (nc)
- Diabetes: $445 million (+7%)
