Medical equipment maker Medtronic, Inc. (MDT) Tuesday reported a decline in fourth-quarter profit, reflecting higher restructuring charges and a gain on sale recorded in the prior year. Adjusted earnings and revenues, however, topped analysts' expectations. Net sales grew, with 4 percent increase in international revenue, which accounted for 47 percent of the company's worldwide revenue.
The shares are currently up about 7 percent in the morning trade.
In the fourth quarter, the company's net earnings declined to $969 million from $991 million in the previous year. However, earnings per share increased to $0.95 from $0.94, on lower share count.
The recent quarter had restructuring charges totaling $0.14 per share, higher than $0.06 per share last year. In addition, the prior-year quarter recorded a gain on sale of Physio-Control of $0.10 per share.
On a non-GAAP basis, earnings per share were $1.10, while the company posted $0.99 per share in the year-ago quarter. On average, 23 analysts polled by Thomson Reuters expected the company to earn $1.03 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter rose 4 percent to $4.46 billion, which also came above analysts' estimate of $4.39 billion. Revenues were up 5 percent at constant currency, after adjusting for a $48 million negative foreign currency impact.
International revenue climbed 4 percent to $2.09 billion.
The Cardiac and Vascular Group, which includes the Cardiac Rhythm Disease Management or CRDM, Coronary, Structural Heart, and Endovascular businesses, reported worldwide sales in the quarter of $2.34 billion, an increase of 4 percent from a year earlier.
Restorative Therapies Group sales improved 4 percent to $2.12 billion. The Group includes Spine, Neuromodulation, Diabetes, and Surgical Technologies businesses.
Omar Ishrak, chairman and chief executive officer of the company said, "These fourth quarter results were a strong finish to a solid fiscal year, and more importantly, represented another step toward our goal of delivering consistent and dependable growth..."
For the fiscal year ended April 26, 2013, the company posted net earnings of $3.47 billion or $3.37 per diluted share, down from $3.62 billion or $3.41 per share in the prior year. Non-GAAP earnings per share were $3.75. Revenues were $16.59 billion, up 3 percent from last year.
Looking ahead to fiscal 2014, the company expects earnings per share to be in the range of $3.80 to $3.85. After adjusting for certain one-time impacts to growth, this range implies annual earnings per share growth in the range of 6 to 8 percent, it said.
Full-year revenue growth is anticipated in the range of 3 to 4 percent on a constant currency basis. Analysts expect the company to report earnings of $3.84 per share, on revenues of $16.99 billion for fiscal 2014.
MDT is currently trading at $53.16, up $3.27 or 6.55 percent, on a volume of 3.27 million shares on the NYSE.
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