Medtronic Reports Second Quarter Financial Results
(Thomson Reuters ONE) -
* Revenue of $7.1 Billion; GAAP Diluted EPS of $1.48; Non-GAAP Diluted EPS of
$1.07
* Given Divestiture, Revenue Decreased 4% as Reported; Increased 3% at
Comparable, Constant Currency or 4% Adjusting for Hurricane Maria Impact
* Company Reiterates Full Year Revenue and EPS Guidance
DUBLIN - November 21, 2017 - Medtronic plc (NYSE: MDT) today announced financial
results for its second quarter of fiscal year 2018, which ended October
27, 2017.
The company reported second quarter worldwide revenue of $7.050 billion, a
decrease of 4 percent as reported, with the decline driven by the company's
divestiture of its Patient Care, Deep Vein Thrombosis (Compression), and
Nutritional Insufficiency businesses to Cardinal Health that occurred at the
beginning of the quarter. Second quarter revenue increased 3 percent on a
comparable, constant currency basis, which adjusts for the divestiture and a $35
million positive impact from foreign currency. Excluding the approximate $55 to
$65 million impact of Hurricane Maria to the company's revenue, which was split
across the company's Minimally Invasive Therapies Group and Restorative
Therapies Group, second quarter revenue growth would have been 4 percent on a
comparable, constant currency basis.
As reported, second quarter GAAP net income and diluted earnings per share (EPS)
were $2.017 billion and $1.48, respectively. As detailed in the financial
schedules included through the link at the end of this release, second quarter
non-GAAP net income and diluted EPS were $1.456 billion and $1.07, decreases of
7 percent and 4 percent, respectively. Adjusting for the divestiture, a positive
1 cent impact from foreign currency, and the approximate 3 cent impact from
Hurricane Maria, second quarter non-GAAP diluted EPS increased approximately 5
percent.
Second quarter U.S. revenue of $3.734 billion represented 53 percent of company
revenue and decreased 10 percent as reported, or was flat on a comparable basis.
Non-U.S. developed market revenue of $2.241 billion represented 32 percent of
company revenue and increased 1 percent as reported, or 5 percent on a
comparable, constant currency basis. Emerging market revenue of $1.075 billion
represented 15 percent of company revenue and increased 9 percent as reported,
or 12 percent on a comparable, constant currency basis.
"Our second quarter financial results are very encouraging, when considered in
the context of a quarter in which we faced three hurricanes and the California
wildfires. Hurricane Maria, in particular, significantly affected our
manufacturing operations in Puerto Rico," said Omar Ishrak, Medtronic chairman
and chief executive officer. "Against this backdrop, we delivered a sequential
acceleration in our organic revenue growth, as expected."
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 second quarter revenue of $2.773 billion
increased 7 percent on both a reported and constant currency basis. CVG revenue
performance was driven by strong, low-double digit growth in CSH and mid-single
digit growth in CRHF and APV, all on a constant currency basis.
* CRHF second quarter revenue of $1.467 billion increased 5 percent, or 4
percent on a constant currency basis. Arrhythmia Management grew in the mid-
single digits on a constant currency basis, driven by high-teens growth in
AF Solutions and low-double digit growth in Diagnostics, both on a constant
currency basis, as well as strong adoption of the Micra(TM) Transcatheter
Pacing System and TYRX(TM) absorbable antibacterial envelope. Heart Failure
grew in the high-single digits on a constant currency basis, driven by
strong demand for the company's portfolio of quadripolar cardiac
resynchronization therapy-pacemakers (CRT-P), as well as growth in
Mechanical Circulatory Support.
* CSH second quarter revenue of $854 million increased 13 percent, or 12
percent on a constant currency basis, led by high-thirties growth on a
constant currency basis in transcatheter aortic valves on the strength of
the recently launched CoreValve(®) Evolut(®) PRO and U.S. intermediate risk
indication. In addition, the Coronary business returned to growth, driven by
the company's recent launch of the Resolute Onyx(TM) drug-eluting stent in
the U.S. and Japan.
* APV second quarter revenue of $452 million increased 5 percent, or 4 percent
on a constant currency basis. Aortic growth was led by the solid adoption of
the Heli-FX(®) EndoAnchor(®) System and solid performance of the Valiant(®)
Captivia(®) thoracic stent graft systems. Peripheral was driven by double
digit growth in both PTA balloons and drug-coated balloons. Mid-single digit
growth in endoVenous was driven by the recently launched Concerto(TM) 3D
detachable coil system.
Minimally Invasive Therapies Group
The Minimally Invasive Therapies Group (MITG) is now organized into the Surgical
Innovations (SI) and the Respiratory, Gastrointestinal & Renal (RGR) divisions
following the divestiture of its Patient Care, Deep Vein Thrombosis
(Compression), and Nutritional Insufficiency (Enteral Feeding) businesses. MITG
worldwide second quarter revenue of $1.952 billion decreased 21 percent as
reported, or increased 2 percent on a comparable, constant currency basis. MITG
second quarter revenue growth reflected mid-single digit growth in SI, which was
affected by Hurricane Maria, offset by low-single digit declines in RGR.
* SI second quarter revenue of $1.334 billion increased 4 percent on a
comparable, 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.
* RGR second quarter revenue of $618 million decreased 3 percent on a
comparable, constant currency basis. The declines were driven by difficult
comparisons in its Respiratory business following the return to market last
year of the Puritan Bennett(TM) 980 ventilator.
Restorative Therapies Group
The Restorative Therapies Group (RTG) includes the Spine, Brain Therapies,
Specialty Therapies, and Pain Therapies divisions. RTG worldwide second quarter
revenue of $1.863 billion increased 2 percent on both a reported and constant
currency basis. Group results were driven by low-double digit growth in Brain
Therapies, offsetting declines in Spine, Specialty Therapies, and Pain
Therapies, all on a constant currency basis. Hurricane Maria primarily affected
the Spine and Pain Therapies division, as well as the Pelvic Health business in
the Specialty Therapies division.
* Spine second quarter revenue of $659 million decreased 1 percent on both a
reported and constant currency basis. Mid-single digit constant currency
growth in Biologics worldwide and low-single digit constant currency growth
in Core Spine in international markets was offset by mid-single digit
declines in Core Spine in the U.S. as a result of the impact of Hurricane
Maria.
* Brain Therapies second quarter revenue of $575 million increased 14 percent,
or 13 percent on a constant currency basis. Growth was driven by high-
twenties constant currency growth in Neurovascular, with strength across its
product portfolio. The Neurosurgery business grew in the mid-teens on a
constant currency basis, led by strong sales of the StealthStation(TM) S8
surgical navigation system, O-arm(®)2 surgical imaging system, Visualase(®)
MRI-guided laser ablation system, and Midas Rex(®) surgical instruments.
* Specialty Therapies second quarter revenue of $365 million decreased 1
percent on both a reported and constant currency basis. Mid-single digit
global constant currency growth in Transformative Solutions, ENT, and high-
single digit international constant currency growth in Pelvic Health was
offset by mid-single digit declines in Pelvic Health in the U.S., with the
declines driven by the impact of Hurricane Maria on InterStim(®) II sales.
* Pain Therapies second quarter revenue of $264 million decreased 8 percent,
or 9 percent on a constant currency basis. Growth in Interventional Pain was
offset by mid-teens declines in Spinal Cord Stimulation and mid-single digit
declines in Pain Pumps, all on a constant currency basis, driven in part by
the impact of Hurricane Maria.
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 second quarter revenue of $462 million was flat, or
decreased 2 percent on a constant currency basis. The group is experiencing
strong global demand for its new sensor-augmented insulin pump systems, and
similar to the first quarter, growth was tempered as demand outpaced supply. The
group's ability to meet increasing patient demand has improved, as evidenced by
the improved sequential revenue growth. In addition, the Diabetes Group's
capacity expansion plans for the second half of fiscal year 2018 are on track.
* IIM second quarter revenue declined in the low-single digits on a constant
currency basis. In the U.S., IIM experienced a 15 percent growth in new
patients. This was offset by delays in converting its existing installed
base to new pumps due to CGM sensor supply constraints. In international
markets, IIM delivered high-single digit constant currency growth due to the
continued strength of the MiniMed(®) 640G system.
* DSS second quarter revenue was flat on a constant currency basis. In the
U.S., consumables benefited from installed base growth and improved patient
utilization, which was offset by price declines and increased payer
requirements. In international markets, the Diabeter business had mid-
twenties patient growth, while in consumables, installed base growth was
offset by temporary market pressures in China and France.
* NDT second quarter revenue declined in the high-twenties on a constant
currency basis given the temporarily limited supply of sensors for
professional CGM. However, the division had 60 percent new account growth in
US primary care.
Guidance
Medtronic today reiterated its revenue and non-GAAP EPS guidance. The company's
guidance is given on a comparable, constant currency basis, which accounts for
the divestiture of certain businesses from its prior period 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 continues to expect 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 $275 million to $375 million for the fiscal year,
including an approximate $155 to $175 million positive impact in the third
fiscal quarter.
In fiscal year 2018, the company continues to expect diluted non-GAAP EPS growth
to be in the range of 9 to 10 percent on a comparable, constant currency basis
from the prior year comparable EPS of $4.37. Assuming current exchange rates
remain similar for the rest of the year, the foreign exchange impact on the
company's non-GAAP EPS would be approximately negative 2 cents for the fiscal
year, including an approximate positive 1 cent impact in the third fiscal
quarter.
"We are seeing increased revenue momentum from several important new product
launches, which we expect to continue into the second half of the fiscal year,"
said Ishrak. "The combination of our growth momentum, business and geographic
diversification, as well as our scale in markets around the world contribute to
our goal of delivering increasingly consistent and dependable results for our
shareholders."
Webcast Information
Medtronic will host a webcast today, November 21, at 8:00 a.m. EST (7:00 a.m.
CST) 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 second quarter financial schedules and non-GAAP reconciliations,
click here. To view the second 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 comparable, constant currency basis, net income, and
diluted EPS, all of which are considered "non-GAAP" financial measures under
applicable SEC rules and regulations. References to quarterly figures increasing
or decreasing are in comparison to the second 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 U.S. generally accepted accounting principles (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 Second Quarter Financial Schedules & Non-GAAP Reconciliations
View FY18 Second 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: 21.11.2017 - 12:45 Uhr
Sprache: Deutsch
News-ID 568834
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