Medtronic net income up nearly 6 percent, beating analysts’ projections

May 24, 2018 GMT

Strong sales of next-generation insulin pumps for diabetes and spinal cord stimulators for chronic pain helped Medtronic PLC’s latest results beat investor expectations.

The company’s profit rose nearly 6 percent in its fiscal fourth quarter, beating the consensus forecast of Wall Street analysts by 3 cents per share. Executives on Thursday gave an upbeat outlook that for more than 8 percent earnings growth in the coming fiscal year.

“Looking ahead, we feel good about the growth opportunities in our markets and our competitive position in these markets. We expect continued revenue growth and margin expansion,” CEO Omar Ishrak said in a statement.

Medtronic shares climbed 2 percent in early trading.

The medical-device maker — operated from headquarters in Fridley — reported net income of $1.9 billion on $8.1 billion in revenue in the three months ended April 25. The profit amounted to $1.42 a share, up 9 cents from a year ago.

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Sales rose at least 5 percent in each of the company’s four product groups, after adjusting for divestitures.

Sales in the diabetes group jumped 21 percent, with revenue of $645 million, as the user base for the innovative MiniMed 670G insulin pump grew to 70,000 active users, Ishrak said.

“Medtronic had a good quarter pretty much across the board, in our view, with nearly every one of its business units exceeding our and consensus’ sales expectations,” Edward Jones analyst John Boylan wrote in a note to investors.

Medtronic’s 2018 full fiscal year also ended April 27. For the year, Medtronic recorded net income of $6.5 billion on $30 billion in revenue. The net income grew 2 percent, though revenue climbed less than 1 percent. Medtronic’s operating profit of $8.35 billion was flat.

For the fiscal year that started on April 28, Medtronic projects revenue to grow between 4 percent and 5 percent, meeting Wall Street’s previously announced expectation for 4.4 percent growth. Earnings for the year are projected to reach up to $5.15 a share, in line with Wall Street estimates.

“Across Medtronic, execution is our top priority,” Omar said Thursday during a conference call with investors. “We know there is much work to be done, but we are excited and optimistic as our dediction is clear, our pipeline is full and our team has never been stronger.”

Joe Carlson • 612-673-4779