Medtronic Posts In Line Earnings, Revenues Beat In Q2

Medtronic Inc.’s (MDT – Analyst Report) second-quarter fiscal 2015 adjusted earnings per share (EPS) came in at 96 cents, up 5.5% year over year, after adjusting for certain one-time items including a special charge related to an after-tax charitable cash donation made to the Medtronic Foundation and acquisition-related items primarily associated with the pending Covidien plc (COV – Analyst Report) acquisition. However, adjusted EPS remained in line with the Zacks Consensus Estimate.

However, the company’s reported net income of $828 million or 83 cents a share were down 8.2% and 6.7%, respectively, on a year-over-year basis.

Medtronic, Inc – Earnings Surprise | FindTheBest

Revenues in the reported quarter grossed $4.366 billion, up 4.1% year over year (up 5% at constant exchange rates or CER). The top line was also marginally ahead of the Zacks Consensus Estimate of $4.363 billion.

International sales (generating 44% of total sales) grew 3% year over year (up 5% at CER) to $1.910 billion in the quarter. Based on Medtronic’s focus on emerging markets, revenues from these regions experienced continued growth momentum and increased 10% (up 12% at CER) to $554 million. This region now accounts for 13% of the company’s total revenue.

Segment Details

Medtronic generates revenues from two major groups – the Cardiac & Vascular Group and the Restorative Therapies Group. The former encompasses the Cardiac Rhythm & Heart Failure, Coronary & Structural Heart and Aortic & Peripheral businesses; while the latter includes the Spine, Neuromodulation and Surgical Technologies segments.

Cardiac Rhythm & Heart Failure sales jumped 5% year over year (up 5% at CER) to $1.320 billion. Although revenues at High Power fell 5% at CER to $670 million on a year-over-year basis, the top line grew 7% sequentially on the back of the successful U.S. launches of Viva XT CRT-D with its AdaptivCRT algorithm and Attain Performa quadripolar lead in the reported quarter.