Medtronic’s financial results beat estimates

Medtronic has announced financial results for its second quarter of fiscal year which ended October 30, 2015 

According to Reuters Medtronic said it now expected an adjusted profit of $4.33-$4.40 per share for 2016 even though analysts on average were expecting a profit of $4.36 per share.

The company reported the second quarter net income and diluted EPS were £343m ($520m) and 24p ($0.36), decreases of 37% and 57%, respectively.  

Medtronic has said that this decline in GAAP earnings was driven primarily by a non-recurring certain tax adjustment resulting from the company's previously disclosed September 28, 2015, internal reorganisation due to the Covidien integration, which allowed approximately £6.5bn ($9.8bn) of cash, cash equivalents and investments in marketable debt and equity securities previously held by US-controlled non-US subsidiaries to be available for general corporate purposes.

Omar Ishrak, Medtronic chairman and chief executive officer, said: "Q2 was another strong quarter.  Our above-market revenue growth remains robust and consistent and we believe sustainable across our groups and regions.”

The better-than-expected quarterly profit was helped by higher sales in all of its divisions according to Reuters.

US revenue of £2.708bn ($4.098bn) represented 58% of the company revenue and increased 6%, or 67% as reported. 

Non-U.S. developed market revenue of £1.356bn $2.052bn represented 29% of the company revenue and increased 4%, or 52% as reported. 

Emerging market revenue of £600m ($908m) represented 13% of the company revenue and increased 11% or 61% as reported.

Ishrak said: “We are steadily executing our plan and meeting our expectations, while at the same time building a foundation for long-term, dependable revenue growth and EPS leverage."

All revenue growth rates are stated on a comparable, constant currency basis, which adjusts for the impact of foreign currency translation and includes Covidien plc in the prior year comparison, aligning Covidien's prior year monthly revenue to Medtronic's fiscal quarters.