Medtronic Q1 Results Top Estimates, Backs Full Year View

(RTTNews) - Medical equipment maker Medtronic Inc. (MDT) Tuesday said first-quarter profit declined from the prior year, even as sales improved. Adjusted earnings and revenues topped Wall Street estimates. The company also backed its full year forecast.

Omar Ishrak, Medtronic chairman and chief executive officer, said, "Our first quarter results are a solid start to fiscal year 2015. Our growth was broad based across businesses and geographies."

Net earnings fell to $871 million from $953 million in the previous year. Earnings per share dropped to $0.87 from $0.93.

Excluding restructuring charges and acquisition-related items, adjusted earnings per share totaled $0.93, while it was $0.88 last year. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.92 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales increased 5 percent to $4.273 billion from $4.083 billion last year. Analysts expected revenues of $4.25 billion. Revenue growth was 4 percent on constant currency basis.

U.S. revenue rose 6 percent in the quarter to $2.333 billion. International revenue grew 3 percent to $1.940 billion and rose 2 percent on a constant currency basis. International sales accounted for 45 percent of Medtronic's worldwide revenue in the quarter. Emerging market revenue climbed 9 percent to $539 million.

Segment-wise, revenue grew 4 percent in Cardiac and Vascular Group to $2.254 billion, driven by growth in Low Power, Structural Heart, Aortic & Peripheral, and AF.

In Restorative Therapies Group, sales grew 3 percent to $1.603 billion, amid growth in Neuromodulation and Surgical Technologies, offset by declines in Spine.

Diabetes revenue climbed 13 percent to $416 million, driven by strong performance in the U.S. from the MiniMed 530G with Enlite, which is the first and only system that automatically stops insulin delivery if glucose levels fall below a predetermined threshold.

Total costs and expenses increased to $3.190 billion from $2.930 billion in the previous year.

Looking ahead, the company continues to expect full-year revenue growth in the range of 3 to 5 percent on a constant currency basis, and adjusted earnings per share in the range of $4.00 to $4.10. Analysts look for full year earnings of $4.04 per share.

Medtronic said in June that it agreed to acquire smaller rival Covidien Plc. (COV) in a cash and stock deal valued at about $42.9 billion. The deal will help Medtronic shift base to Ireland and save it from paying high U.S. corporate taxes.

Today, the firm said it is fully committed to completing the acquisition in the calendar fourth quarter of 2014 or early 2015.

MDT closed up 0.4 percent on Monday at $63.47.