Medical equipment maker Medtronic, Inc. (MDT: Quote) on Tuesday reported a 6 percent increase in profit for the third quarter on higher revenue. Adjusted earnings per share beat analysts expectations, while revenue matched their estimates. Looking ahead, the company reiterated its financial outlook for fiscal 2013.
Omar Ishrak, Medtronic chairman and chief executive officer said, "We remain committed to delivering dependable growth in a changing healthcare environment as reflected in our third quarter performance. Several businesses and regions contributed to our steady growth this quarter, and we are focused on effectively managing headwinds and tailwinds to deliver balanced and consistent overall performance."
The Cardiac and Vascular Group reported revenues for the third quarter of $2.10 billion, up 3 percent from last year. The segment includes the Cardiac Rhythm Disease Management or CRDM, Coronary, Structural Heart, and Endovascular businesses.
Revenue for the segment increased 5 percent on a constant currency basis, driven by growth in Coronary, Endovascular, Structural Heart, and AF Solutions. This was partly offset by declines in implantable cardioverter defibrillators or ICDs.
Within the segment, CRDM revenue declined 2 percent from last year. Revenue from implantable cardioverter defibrillators declined 3 percent, while pacing revenue decreased 2 percent.
Meanwhile, coronary revenue climbed 16 percent from the year-ago period to $445 million. Sales of drug-eluting stents increased 42 percent on a constant currency basis, reflecting continued significant share gains of the Resolute Integrity drug-eluting stent in Japan and strong performances in the U.S. as well as other global markets.
The Restorative Therapies Group, which includes the Spine, Neuromodulation, Diabetes, and Surgical Technologies businesses, reported a 2 percent increase in sales for the quarter to $1.93 billion.
Broadly, international revenue for the quarter increased 5 percent from the prior-year period to $1.86 billion, while emerging market revenue climbed 20 percent to $475 million.
Medtronic's net earnings for the third quarter increased to $988 million or $0.97 per share from $935 million or $0.88 per share in the year-ago period.
Excluding one-time items, adjusted earnings for the quarter were $946 million or $0.93 per share, compared to adjusted earnings of $888 million or $0.84 per share in the same period last year. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.91 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 3 percent to $4.03 billion from $3.92 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $4.03 billion. On a constant currency basis, sales rose 4 percent after adjusting for a $41 million foreign currency impact.
Looking ahead to fiscal 2013, Medtronic reiterated its financial outlook. The company still expects earnings in a range of $3.66 to $3.70 per share, implying annual earnings per share growth of 6 to 7 percent, and revenue growth of 3 to 4 percent on a constant currency basis.
Analysts expect the company to earn $3.68 per share for the year on revenues of $16.53 billion.
MDT closed Friday's trading at $47.12. In Tuesday's pre-market, the stock is adding $0.20 or 0.42 percent to $47.32.
by RTT Staff Writer
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