Some Good News In Medtronic’s Financials: A Sign Of Things To Come?

In short

We don’t usually cover financial results to any great extent, except where they stand out from the crowd, which seems to be the case with Medtronic’s most recent issuance.

Year on year quarterly sales up by 4% with earnings up by 28%. Full year sales up 3% on prior year with earnings up 17%. Full year international sales up 7% for the year and accounted for 46% of Medtronic sales in Q4. Emerging market revenue up 20% and now represent 11% of company revenue.

Background

The full release can be found here, but for a few headlines:

Medtronic Inc. has issued its quarterly statement in which it has reported worldwide fourth quarter revenue of $4.297 billion, compared to the $4.167 billion reported in the fourth quarter of fiscal year 2011, an increase of 4% on a constant currency basis after adjusting for a $42 million negative foreign currency impact or 3% as reported.

As reported, fourth quarter net earnings were $991 million an increase of 28% over the same period in the prior year.

The company reported full fiscal year 2012 revenue of $16.184 billion, an increase of 3% on a constant currency basis after adjusting for a $273 million positive foreign currency impact or 4% as reported.

As reported, full fiscal year 2012 net earnings were $3.617 billion an increase of 17%.

Fiscal year 2012 international revenue of $7.356 billion grew 7% on a constant currency basis.

Fourth quarter international revenue of $1.998 billion increased 7% on a constant currency basis.

International sales accounted for 46% of Medtronic’s worldwide revenue in the quarter.

Emerging market revenue of $463 million increased 20% on a constant currency basis or 19% as reported and now represents 11 percent of company revenue.

Highlight products

The Coronary business grew worldwide revenue 12 percent on a constant currency basis and U.S. revenue 24 percent on the impressive launch of the Resolute™ Integrity® drug-eluting stent, resulting in a doubling of U.S. drug-eluting stent market share.  The Structural Heart and Endovascular & Peripheral businesses grew worldwide revenue 7% and 10%, respectively, on a constant currency basis.

Restorative Therapies Group international sales of $710 million increased 11% on a constant currency basis.

Spine revenue of $818 million declined 6% on a constant currency basis despite international sales for the Spine business increasing by 8%. The main culprit looks like US Infuse which drove US biologics revenue down 8%.

Neuromodulation revenue of $463 million increased 8 percent on a constant currency basis, driven by an increase in new implants in pain stimulation(U.S. and Japan launches of the RestoreSensor® spinal cord stimulator with its proprietary AdaptiveStim® technology), deep brain stimulation (DBS), and stimulation for incontinence indications(Uro/Gastro, sales of InterStim® Therapy).

Diabetes revenue of $392 million grew 8 percent on a constant currency basis, driven by strong sales of continuous glucose monitoring (CGM) products and consumables.  The Enlite™ CGM sensor had solid growth in Europe, and the company continues to make progress on its IDE study for U.S. approval of this next generation sensor.

Surgical Technologies revenue of $371 million grew 25 percent on a constant currency basis.  Organic revenue growth accelerated to 14 percent, after adjusting for $34 million of revenue from the Advanced Energy business, consisting of the company’s Salient Surgical Technologies and PEAK Surgical acquisitions.  Revenue growth was driven by strong sales of capital equipment in the ENT and Navigation businesses.

Company comments

“I am pleased with our improved revenue growth this quarter in a dynamic healthcare environment,” said Omar Ishrak, Medtronic chairman and chief executive officer. “Our growth was broad-based across our businesses and geographies, including strong U.S. launches of the Resolute™ Integrity® drug-eluting stent and RestoreSensor® spinal cord stimulator and strong growth in emerging markets. As we continue to focus on innovation, globalization, and execution, I see many opportunities for improved growth.”

Source: Medtronic Inc.,