Medtronic has posted financial results for its first quarter of fiscal year 2014, ended July 26, 2013. It’s forecasts for revenue and EPS for FY 2014 remain as stated in last year-end financials, although sales estimates were a smidge lower than anticipated by analysts.
The company reported worldwide first quarter revenue of $4.083 billion, compared to the $4.008 billion reported in the first quarter of fiscal year 2013, an increase of 3 percent on a constant currency basis, albeit slightly off the 4.11 billion expected by the markets. Net earnings were $953 million, or $0.93 per diluted share, an increase of 10 percent and 12 percent, respectively, over the same period in the prior year.
Geographically, international revenue of $1.887 billion increased 9 percent on a constant currency basis, accounting for 46 percent of Medtronic’s worldwide revenue in the quarter. Emerging market revenue of $504 million increased 15 percent and represents 12 percent of company revenue.
Revenue by division
Cardiac and Vascular Group
A modest decline in the Implantable Cardioverter/Defibrillators (ICD) business couldn’t detract from what was a solid quarter for this business unit. The Group had worldwide sales in the quarter of $2.160 billion, representing an increase of 4 percent on a constant currency basis, driven by solid growth in Structural Heart, Pacing, Endovascular, AF Solutions, and Coronary. Group international sales of $1.234 billion increased 9 percent on a constant currency basis.
Restorative Therapies Group
The Restorative Therapies Group includes the Spine, Neuromodulation, and Surgical Technologies businesses. The Group had worldwide sales in the quarter of $1.554 billion, representing an increase of 3 percent on a constant currency basis or 2 percent as reported. Group revenue performance on a constant currency basis was driven by growth in Surgical Technologies, Neuromodulation, and Core Spine, partially offset by declines in BMP. Group international sales of $492 million increased 9 percent on a constant currency basis.
Diabetes group revenue of $369 million grew 1 percent on both a constant currency and an as reported basis. International sales of $161 million increased 8 percent on both a constant currency and an as reported basis driven by strong adoption of the Veo(TM) insulin pump with its low-glucose suspend feature and the Enlite® continuous glucose monitoring (CGM) sensor. Slow insulin pump system sales continued in the United States due to the delayed launch of the MiniMed® 530G.
“Our Q1 results reflect that we are broadly outperforming our sector,” said Omar Ishrak, Medtronic chairman and chief executive officer. “At the same time, we continue to strengthen and geographically diversify our business and remain confident in both our outlook for the remainder of the year and our long-term competitive position in the changing healthcare environment.”
“We continue to make progress on our transformational opportunities of globalization and economic value, which we believe will establish durability in our long-term performance and create potential upside to our baseline expectations,” said Ishrak. “Ultimately, we intend to transform Medtronic from being primarily a device provider today into the premier global medical technology solutions partner of tomorrow.”
The company reiterated its revenue outlook and diluted earnings per share (EPS) guidance for fiscal year 2014. In fiscal year 2014, the company continues to expect full-year revenue growth in the range of 3 to 4 percent on a constant currency basis, and diluted EPS in the range of $3.80 to $3.85, which implies annual diluted non-GAAP EPS growth in the range of 6 to 8 percent after adjusting for certain items.
Source: Medtronic, Inc.