Medtronic Reports First Quarter Financial Results
(Thomson Reuters ONE) -
* Revenue of $7.390 Billion Grew 3% as Reported; 4% at Constant Currency
* GAAP Diluted EPS of $0.74; Q1 Non-GAAP Diluted EPS of $1.12
* GAAP Operating Margin Improved 250bps; Non-GAAP Operating Margin Improved
50bps at Constant Currency
* Company Reiterates Full Year Revenue and EPS Guidance
DUBLIN - August 22, 2017 - Medtronic plc (NYSE: MDT) today announced financial
results for its first quarter of fiscal year 2018, which ended July 28, 2017.
The company reported first quarter worldwide revenue of $7.390 billion, compared
to the $7.166 billion reported in the first quarter of fiscal year 2017, an
increase of 3 percent, or 4 percent on a constant currency basis. Foreign
currency had a negative $33 million impact on first quarter revenue. As
reported, first quarter GAAP net income and diluted earnings per share (EPS)
were $1.016 billion and $0.74, respectively. As detailed in the financial
schedules included through the link at the end of this release, first quarter
non-GAAP net income and diluted EPS were $1.541 billion and $1.12, an increase
of 7 percent and 9 percent, respectively. After adjusting for the negative 2
cent impact from foreign currency, non-GAAP diluted EPS increased 11 percent.
First quarter U.S. revenue of $4.042 billion represented 55 percent of company
revenue and increased 1 percent. Non-U.S. developed market revenue of $2.313
billion represented 31 percent of company revenue and increased 4 percent, or 5
percent on a constant currency basis. Emerging market revenue of $1.035 billion
represented 14 percent of company revenue and increased 11 percent, or 12
percent on a constant currency basis.
"The strength of our diversification and solid underlying performance of our
businesses, combined with the stable growth of our end markets, enabled us to
manage the impact of a global IT system disruption and temporary Diabetes sensor
supply constraint," said Omar Ishrak, Medtronic chairman and chief executive
officer. "While these temporary issues had affected first quarter revenue
growth, we continued to drive operating margin expansion. This resulted in
double-digit constant currency EPS growth, consistent with our long-term
expectations."
Cardiac and Vascular Group
The Cardiac and Vascular Group (CVG) includes the Cardiac Rhythm & Heart Failure
(CRHF), Coronary & Structural Heart (CSH), and Aortic & Peripheral Vascular
(APV) divisions. CVG worldwide first quarter revenue of $2.646 billion increased
5 percent, or 6 percent on a constant currency basis. CVG revenue performance
was driven by strong, balanced growth across all three divisions.
* CRHF first quarter revenue of $1.390 billion increased 4 percent, or 5
percent on a constant currency basis. Arrhythmia Management growth was
driven by high-teens growth in AF Solutions on a constant currency basis,
increased penetration of the Micra(®) transcatheter pacing system, strong
adoption of the TYRX(TM) absorbable antibacterial envelope, and continued
global demand for the Reveal LINQ(®) insertable cardiac monitor. Heart
Failure growth was driven by strong demand for Medtronic's recently launched
portfolio of quadripolar cardiac resynchronization therapy-pacemakers (CRT-
P), as well as growth in left ventricular assist devices (LVAD) as the
business accelerates sales resulting from the company's second quarter
fiscal year 2017 acquisition of HeartWare International, Inc.
* CSH first quarter revenue of $817 million increased 7 percent, or 8 percent
on a constant currency basis, led by high-thirties growth on a constant
currency basis in transcatheter aortic valves as a result of strong customer
adoption of the CoreValve(®) Evolut(®) PRO platform in the U.S. and
continued demand for the CoreValve(®) Evolut(®) R 34mm valve in the U.S. and
Europe.
* APV first quarter revenue of $439 million increased 4 percent, or 5 percent
on a constant currency basis. Aortic growth was led by the continued
strength of the Endurant(®) IIs aortic stent graft and solid adoption of the
Heli-FX(®) EndoAnchor(®) System. Peripheral was driven by low-double digit
growth in both atherectomy and drug-coated balloons.
Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical Solutions
and the Patient Monitoring & Recovery (PMR) divisions. MITG worldwide first
quarter revenue of $2.486 billion increased 3 percent on both a reported and
constant currency basis. MITG first quarter revenue growth reflected mid-single
digit growth in Surgical Solutions and low-single digit growth in PMR.
* Surgical Solutions first quarter revenue of $1.399 billion increased 4
percent on both a reported and constant currency basis, driven by new
products in Advanced Stapling and Advanced Energy, including endo stapling
specialty reloads, the Signia(TM) powered stapler, and LigaSure(TM) vessel
sealing instruments.
* PMR first quarter revenue of $1.087 billion increased 1 percent on both a
reported and constant currency basis, driven by sales of Nellcor(TM) pulse
oximetry products, the Capnostream(TM) capnography monitors, and growth in
capnography disposables. These product lines, along with airway and
ventilation products, remain with Medtronic following the sale of a portion
of the company's PMR division to Cardinal Health at the beginning of the
second quarter. This is the last quarter of reporting revenue for the
recently divested Patient Care, Deep Vein Thrombosis (Compression), and
Nutritional Insufficiency (Enteral Feeding) businesses.
Restorative Therapies Group
The Restorative Therapies Group (RTG) includes the Spine, Brain Therapies,
Specialty Therapies, and Pain Therapies divisions. RTG worldwide first quarter
revenue of $1.809 billion increased 2 percent on both a reported and constant
currency basis. Group results were driven by high-single digit growth in Brain
Therapies, mid-single digit growth in Specialty Therapies, and low-single digit
growth in Spine, offsetting declines in Pain Therapies.
* Spine first quarter revenue of $649 million increased 1 percent on both a
reported and constant currency basis. Core Spine grew in the low-single
digits on a constant currency basis, driven in part by the focus on "Speed-
to-Scale" product launches and high-single digit growth in Other Biologics.
* Brain Therapies revenue of $522 million increased 7 percent on both a
reported and constant currency basis, with strength in Neurovascular and
Neurosurgery. Neurovascular grew in the high-teens with double-digit growth
across all geographies on a constant currency basis, driven by strength in
sales of the Solitaire(TM) family of revascularization devices and continued
adoption of Axium(TM) Prime Extra Soft detachable coils. Neurosurgery grew
in the high-single digits on a constant currency basis, driven by strong
sales of the recently launched StealthStation(TM) S8 surgical navigation
system in the U.S. and Europe.
* Specialty Therapies revenue of $369 million increased 4 percent on both a
reported and constant currency basis. All three businesses contributed to
growth, with Transformative Solutions (formerly Advanced Energy) growing in
the high-single digits, ENT growing in the mid-single digits, and Pelvic
Health growing in the low-single digits, all on a constant currency basis.
* Pain Therapies revenue of $269 million decreased 5 percent, or 4 percent on
a constant currency basis. Pain Therapies had high-single digit constant
currency declines in Spinal Cord Stimulation as the business faced
competitive pressures, partially offset by low-single digit constant
currency growth in Interventional Pain.
Diabetes Group
The Diabetes Group includes the Intensive Insulin Management (IIM), Diabetes
Service & Solutions (DSS), and Non-Intensive Diabetes Therapies (NDT) divisions.
Diabetes Group worldwide first quarter revenue of $449 million decreased 1
percent on both a reported and constant currency basis. The group is
experiencing strong global demand for its new sensor-augmented insulin pump
systems, but is temporarily affected by the previously disclosed limited supply
of continuous glucose monitor (CGM) sensors. The group's differentiated strategy
of moving toward fully closed loop systems, including the recent U.S. launch of
the first hybrid closed loop system, the MiniMed(®) 670G, has led to increased
demand and adoption of its sensor-augmented insulin pumps. The additional demand
has resulted in fulfillment prioritization to the existing installed based,
including MiniMed(®) 670G Priority Access Program customers, affecting sales of
sensor-augmented pumps to new customers in the near-term. In addition, strong
customer enrollment in its Priority Access Program is also temporarily affecting
revenue growth.
* IIM declined in the low-single digits on a constant currency basis with mid-
teens declines in the U.S. reflecting the temporarily limited supply of
sensors. The division delivered high-teens constant currency growth in
international markets due to strong adoption of CGM sensors and the
continued strength of the MiniMed(®) 640G system.
* DSS grew in the low-single digits on a constant currency basis driven by a
return to growth in the U.S. from patient engagement programs, as well as
continued international growth, supported by the Guardian(®) Connect mobile
CGM system.
* NDT declined mid-single digits on a constant currency basis. The division
grew in the low-double digits in the U.S. on sales to primary care
physicians of the iPro(®)2 Professional CGM technology with Pattern
Snapshot.
IT System Disruption
On June 27, 2017, the company filed its annual report on Form 10-K for fiscal
year 2017 and on July 17, 2017, the company furnished a current report on Form
8-K, each of which disclosed an IT system disruption that occurred the week of
June 19, 2017, impacting Medtronic's customer ordering, distribution, and
manufacturing processes globally. The underlying technical issue was identified
and corrective measures were taken to restore the system. The company responded
over the course of the quarter to fulfill backlog orders taken during the IT
disruption. A third-party analysis has confirmed the root cause of the system
disruption and the company is taking appropriate actions to prevent this type of
event from happening in the future. While the ultimate impact of the IT
disruption did have some impact on the company's overall performance for the
quarter, it was not material to Medtronic's quarterly revenue or EPS.
Guidance
The company's guidance is given on a comparable, constant currency basis, which
accounts for the divestiture of certain businesses in its Patient Monitoring &
Recovery division by removing the financial impact of these businesses from the
second, third, and fourth quarters of fiscal year 2017, as well as removing the
impact of foreign currency. In fiscal year 2018, the company expects comparable,
constant currency revenue growth to be in the range of 4 to 5 percent. While the
impact of foreign currency remains fluid, if current exchange rates remain
similar for the remainder of the fiscal year, the company's revenue would be
positively affected by approximately $380 million to $480 million for the fiscal
year, including an approximate $25 to $75 million positive impact in the second
fiscal quarter.
In fiscal year 2018, the company expects diluted non-GAAP EPS growth to be in
the range of 9 to 10 percent on a comparable, constant currency basis. Assuming
current exchange rates remain similar for the rest of the year, the company's
non-GAAP EPS would be affected by an approximate negative $0.03 to positive
$0.01, including an approximate $0.00 to positive $0.02 impact in the second
fiscal quarter.
"Looking ahead, we have now entered a period of clear acceleration in our
innovation cycle, and we expect to see increasing momentum coming from several
new product launches over the balance of the fiscal year," said Ishrak.
"Delivering innovative medical technology, such as our Micra Transcatheter
Pacing System and MiniMed 670G Insulin Pump System, expanding in markets and
geographies around the world, leading the shift to value-based healthcare, and
purposefully deploying our capital are the foundations of our sustainable and
diversified growth platform, positioning us to create value for patients,
healthcare systems, and our shareholders."
Webcast Information
Medtronic will host a webcast today, August 22, at 8:00 a.m. EDT (7:00 a.m. CDT)
to provide information about its businesses for the public, analysts, and news
media. This quarterly webcast can be accessed by clicking on the Investor Events
link at investorrelations.medtronic.com and this earnings release will be
archived at newsroom.medtronic.com. Medtronic will be live tweeting during the
webcast on our Newsroom Twitter account, (at)Medtronic. Within 24 hours of the
webcast, a replay of the webcast and transcript of the company's prepared
remarks will be available by clicking on the Investor Events link at
investorrelations.medtronic.com.
Financial Schedules
To view the first quarter financial schedules and non-GAAP reconciliations,
click here. To view the first quarter earnings presentation, click here. Both
documents can also be accessed by visiting newsroom.medtronic.com.
About Medtronic
Medtronic plc (www.medtronic.com), headquartered in Dublin, Ireland, is among
the world's largest medical technology, services and solutions companies -
alleviating pain, restoring health and extending life for millions of people
around the world. Medtronic employs more than 84,000 people worldwide, serving
physicians, hospitals and patients in approximately 160 countries. The company
is focused on collaborating with stakeholders around the world to take
healthcare Further, Together.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, which are subject to
risks and uncertainties, including those described in Medtronic's periodic
reports and other filings with the U.S. Securities and Exchange Commission (the
"SEC"). Anticipated results only reflect information available to Medtronic at
this time and may differ from actual results. Medtronic does not undertake to
update its forward-looking statements or any of the information contained in
this press release. Certain information in this press release includes
calculations or figures that have been prepared internally and have not been
reviewed or audited by our independent registered public accounting firm,
including but not limited to, certain information in the financial schedules
accompanying this press release. Use of different methods for preparing,
calculating or presenting information may lead to differences and such
differences may be material.
NON-GAAP FINANCIAL MEASURES
This press release contains financial measures and guidance, including revenue
and growth rates on a constant currency basis, net income, and diluted EPS, all
of which are considered "non-GAAP" financial measures under applicable SEC rules
and regulations. Unless otherwise noted, all revenue amounts given in this press
release are stated in accordance with U.S. generally accepted accounting
principles (GAAP). References to quarterly figures increasing or decreasing are
in comparison to the first quarter of fiscal year 2017.
Medtronic management believes that in order to properly understand its short-
term and long-term financial trends, including period over period comparisons of
the company's operations, investors may find it useful to exclude the effect of
certain charges or gains that contribute to or reduce earnings but that result
from transactions or events that management believes may or may not recur with
similar materiality or impact to operations in future periods (Non-GAAP
Adjustments). Medtronic generally uses non-GAAP financial measures to facilitate
management's review of the operational performance of the company and as a basis
for strategic planning. Non-GAAP financial measures should be considered
supplemental to and not a substitute for financial information prepared in
accordance with GAAP, and investors are cautioned that Medtronic may calculate
non-GAAP financial measures in a way that is different from other companies.
Management strongly encourages investors to review the company's consolidated
financial statements and publicly filed reports in their entirety.
Reconciliations of the non-GAAP financial measures to the most directly
comparable GAAP financial measures are included in the financial schedules
accompanying this press release.
Medtronic calculates forward-looking non-GAAP financial measures based on
internal forecasts that omit certain amounts that would be included in GAAP
financial measures. For instance, forward-looking revenue growth and EPS
projections exclude the impact of foreign currency fluctuations. Forward-looking
non-GAAP EPS guidance also excludes other potential charges or gains that would
be recorded as Non-GAAP Adjustments to earnings during the fiscal year.
Medtronic does not attempt to provide reconciliations of forward-looking non-
GAAP EPS guidance to projected GAAP EPS guidance because the combined impact and
timing of recognition of these potential charges or gains is inherently
uncertain and difficult to predict and is unavailable without unreasonable
efforts. In addition, we believe such reconciliations would imply a degree of
precision and certainty that could be confusing to investors. Such items could
have a substantial impact on GAAP measures of financial performance.
-end-
View FY18 First Quarter Financial Schedules & Non-GAAP Reconciliations
View FY18 First Quarter Earnings Presentation
Contacts:
Fernando Vivanco
Public Relations
+1-763-505-3780
Ryan Weispfenning
Investor Relations
+1-763-505-4626
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Medtronic plc via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 22.08.2017 - 12:45 Uhr
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