Hurricane damage in Puerto Rico and wildfires rampaging in Northern California put a hit on Medtronic (NYSE:MDT) in recent weeks, with the company estimating a $250 million hit from Hurricane Maria and evacuating facilities in Sonoma County, Calif.
Maria delivers a $250m hit
Fridley, Minn.-based Medtronic said last week that Maria damaged each of its plants in Puerto Rico, operated across all four of its divisions. Although all sites are partially up and running and limited production began Oct. 2, the company said it expects to take a $250 million hit to both sales and adjusted profits during its fiscal second quarter ending Oct. 27.
Most importantly, Medtronic said, it’s verified the well-being of 90% of its 5,000 full-time and contract workers and their families on the Isla del Encanto. Most have returned to work and the company is providing water, food, generators and other supplies; the Medtronic Employee Emergency Assistance Fund is providing direct financial aid to workers affected by Maria and is matching employee donations to the fund. And the Medtronic Foundation put $1 million toward disaster relief and is likewise matching donations to authorized agencies.
“The impact to lives and the devastation to property in Puerto Rico is unprecedented and indescribable,” chairman & CEO Omar Ishrak said in prepared remarks. “And yet, the resiliency and spirit of our Medtronic colleagues in Puerto Rico remains strong. We are eternally grateful for the commitment of our Puerto Rican colleagues who have returned to work to restore our operations – many of whom have lost everything in this storm. The entire Medtronic community is rallying to the need of our colleagues and neighbors in Puerto Rico, and we will be with them through this period and beyond.
“We are extremely focused on restoring our manufacturing operations in Puerto Rico as quickly as possible, as well as prioritizing our available inventory to patient surgeries over large volume orders from customers,” Ishrak said. “While we are expecting a temporary impact to our financial results from Hurricane Maria, we are pleased with the early reception of our new product launches, which are contributing to the underlying strength and fundamentals of our business.”
Wildfires force evacuations
The wildfires ravaging California’s wine country, which have already killed 10 people, reportedly forced Medtronic to evacuate four buildings in Sonoma and Santa Rosa, Calif., including facilities in Fountaingrove and Coffey Lane, spokesman Fernando Vivanco told the Minneapolis Star-Tribune.
“We are closely monitoring the wildfires in Santa Rosa and Sonoma County, and our first priority is the safety of our employees, many of whom are being evacuated,” Vivanco told the newspaper via email. “We have initiated our business continuity plans and are accounting for and keeping in contact with employees in the area.”