Medtronic Tops Q3 Earnings, Revenues; Offers Joint Q4 View

Medtronic plc (MDT – Analyst Report) reported third-quarter fiscal 2015 financial results of the legacy Medtronic Inc., following the completion of the long-awaited $42.9 billion takeover of its Irish counterpart, Covidien, on Jan 26. The merger did not have any impact on the company’s operational results for the fiscal third quarter.

Adjusted earnings per share (EPS) came in at $1.01 in the third quarter, up 10.9% year over year and ahead of the Zacks Consensus Estimate by 4 cents. Adjustments in the reported quarter included special gains related to divestiture recognized in connection with the sale of a product line in the Surgical Technologies division, costs incurred in connection with the Covidien acquisition and the impact of the buyout on interest expense.

The company’s reported net income of $977 million or 98 cents a share were up 28% and 31%, respectively, on a year-over-year basis.

Medtronic Inc. – Earnings Surprise | FindTheBest

Revenues in the reported quarter grossed $4.318 billion, up 3.7% year over year (up 8% at constant exchange rates or CER). The top line also surpassed the Zacks Consensus Estimate of $4.260 billion.

International sales (generating 43% of total sales) dropped 2% year over year (up 7% at CER) to $1.859 billion in the quarter. Based on Medtronic’s focus on emerging markets, revenues from these regions experienced continued growth momentum and increased 6% (up 12% at CER) to $542 million. This region now accounts for 12.6% of the company’s total revenue.

Segment Details

Prior to the merger, Medtronic Inc. generated revenues from three groups, viz. Cardiac & Vascular Group (CVG), Restorative Therapies Group (RTG) and Diabetes Group.

The legacy Cardiac and Vascular Group comprised Cardiac Rhythm & Heart Failure, Coronary & Structural Heart, and Aortic & Peripheral Vascular divisions. On the other hand, the Restorative Therapies Group included the Spine, Neuromodulation and Surgical Technologies segments while the legacy Diabetes Group included the Intensive Insulin Management, Non-Intensive Diabetes Therapies, and Diabetes Services & Solutions divisions.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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