Medtronic Q1 Profit Rises, Meets View; Backs 2014 Outlook

(RTTNews) - Medical device maker Medtronic, Inc. (MDT) reported Tuesday a profit for the first quarter that increased 10 percent from last year, reflecting revenue growth amid continued strength in emerging markets. Adjusted earnings per share for the quarter matched analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also reaffirmed its earnings and revenue growth guidance for the full-year 2014.

"Our Q1 results reflect that we are broadly outperforming our sector. 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," Chairman and CEO Omar Ishrak said in a statement.

The Minneapolis, Minnesota-based company reported net earnings of $9534 million or $0.93 per share for the first quarter, higher than $864 million or $0.83 per share in the prior-year quarter.

Excluding charges, the company's adjusted net earnings for the quarter was $898 million or $0.88 per share, compared to $883 million or $0.85 per share in the year-ago quarter.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.88 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter increased 2 percent or 3 percent in constant currency to $4.08 billion from $4.01 billion in the same quarter last year, but missed eighteen Wall Street analysts' consensus estimate of $4.11 billion by a whisker.

International revenues for the quarter grew 6 percent or 9 percent on a constant currency basis, to $1.89 billion, and accounted for 46 percent of Medtronic's worldwide revenues. Revenues from emerging markets increased 15 percent on both a constant currency and as reported basis, to $504 million from last year.

Revenues for Medtronic's cardiac and vascular group, which includes the Cardiac Rhythm Disease Management (CRDM), Coronary, Structural Heart, and Endovascular businesses, grew 2 percent or 4 percent in constant currency, to $2.16 billion from last year.

Revenues for CRDM unit, by far its biggest business line, was flat or increased 2 percent in constant currency, to $1.19 billion. Meanwhile, revenues from Implantable Cardioverter Defibrillators or ICDs, declined 2 percent in constant currency, to $655 million from last year.

Revenues for the restorative therapies group, which includes the Spine, Neuromodulation, Diabetes, and Surgical Technologies businesses, grew 2 percent or 3 percent in constant currency, to $1.55 billion from last year. Spine revenues declined 3 percent or 1 percent in constant currency, while Neuromodulation revenue grew 2 percent or 3 percent in constant currency from last year.

Diabetes group revenues grew 1 percent on both reported and constant currency basis, to $369 million from a year ago.

Looking ahead to fiscal 2014, the company continues to expect adjusted earnings in a range of $3.80 to $3.85 per share, on projected revenue growth in the range of 3 to 4 percent on a constant currency basis.

Street is currently looking for full-year 2014 earnings of $3.84 per share on revenues of $16.95 billion.

"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," Ishrak added.

The company noted that it ultimately intends to transform Medtronic from being primarily a device provider today into the premier global medical technology solutions partner of tomorrow.

MDT closed Monday's regular trading session at $54.10, up $0.45 on a volume of 4.33 million shares. In the past 52-week period, the stock has been trading in a range of $40.19 to $55.98.