Medtronic (NYSE:MDT) today reported fiscal year-end results that topped both sales and earnings estimates on Wall Street, sending share prices up a tick this morning.
The world’s largest pure-play medical device maker said it swung to Q4 black for the 3 months ended April 29, after putting up a -$1 million loss during the same period last year. Profits for Q4 2016 were $1.10 billion, or 78¢ per share, on sales growth of 3.6% to $7.57 billion compared with Q4 2015.
Adjusted to exclude 1-time items, earnings per share were 10¢ ahead of Wall Street at $1.37 for the quarter; analysts were also looking for Q4 sales of $7.48 billion.
Full-year profits surged 32.3% to $3.54 billion, or $2.48 per share, on sales growth of 42.3% compared with the last fiscal year, to $28.83 billion. Adjusted EPS were $4.84, 47¢ ahead of analysts’ consensus estimate, which put annual sales at $28.72 billion.
“Our organization once again successfully delivered strong, balanced revenue growth across our groups and geographic regions – growing above the market and exceeding our revenue growth projections,” chairman & CEO Omar Ishrak said in prepared remarks. “This quarter caps a transformative year for Medtronic, our 1st full year after closing the largest-ever medtech acquisition. I am pleased with the execution and focus of our teams around the world who delivered sustained revenue growth and exceeded our Covidien cost synergy commitments.”
Medtronic said it expects adjusted EPS of $4.60 to $4.70, or growth of 12% to 16% on a constant-currency basis, for fiscal 2017. Sales growth is pegged at the upper half of the mid-single digits, or 5% to 6% on a constant-currency basis.
“As we enter our new fiscal year, we look forward to delivering on our robust pipeline of products and services, expanding our global reach to serve more patients, and partnering with others around the world to develop new value-based business models,” Ishrak said. “We believe that Medtronic can play a meaningful leadership role with others in healthcare that can lead to better outcomes for patients, while improving overall healthcare system performance.”
Expanded insurance coverage for more Americans under the Affordable Care Act supported an uptick in demand, as did greater use of minimally invasive procedures such as heart valve replacement, Ishrak said.
“Because minimally invasive procedures are easier, safer and less traumatic for patients, it will get more people off the fence about having surgery,” he said.
MDT shares ticked up 0.7% to $82.24 apiece this morning, after closing up 0.6% May 27 at $81.67 per share. But the stock fell -1.9% to $80.12 by mid-afternoon.
CRM sales rise 7%
Sales for Medtronic’s largest division, cardiac rhythm & heart failure, grew 7% to $1.49 billion during the 4th quarter; overall cardiac & vascular segment sales were $2.74 billion, up 5%.
Minimally invasive therapies, including surgical solutions and patient monitoring revenues, grew sales by 3% to $2.46 billion for the quarter.
Fridley, Minn.-based Medtronic said restorative therapies sales were up 1% to $1.88 billion, including a -1% decline for its spine division at $737 million and a -5% slide to $494 million in neuromodulation.
Diabetes sales grew 6% to $496 million, the company said.
Material from Reuters was used in this report.
