-
Revenue of $7.4 Billion
Increased 1% as Reported; 7% at Comparable, Constant
Currency
-
GAAP Diluted LPS of $1.03;
Non-GAAP Diluted EPS of $1.17
-
Company Reiterates Full Year
Revenue and EPS Guidance
DUBLIN - February
20, 2108 - Medtronic plc (NYSE: MDT) today announced
financial results for its third quarter of fiscal year 2018, which
ended January 26, 2018.
The company reported third quarter worldwide
revenue of $7.369 billion, an increase of 1 percent as reported, or
7 percent on a comparable, constant currency basis, which adjusts
for the divestiture of its Patient Care, Deep Vein Thrombosis
(Compression), and Nutritional Insufficiency businesses to Cardinal
Health that occurred in the second quarter, and a $177 million
positive impact from foreign currency.
As reported, third quarter GAAP net loss and loss
per share (LPS) were $1.389 billion and $1.03, respectively. GAAP
results included a $2.2 billion net charge primarily related to the
U.S. transition tax charge as part of U.S. tax reform. As detailed
in the financial schedules included through the link at the end of
this release, third quarter non-GAAP net income and diluted EPS
were $1.592 billion and $1.17, increases of 3 percent and 4
percent, respectively. Adjusting for the divestiture and a negative
1 cent impact from foreign currency, third quarter non-GAAP diluted
EPS increased 12 percent.
Third quarter U.S. revenue of $3.912 billion
represented 53 percent of company revenue and decreased 5 percent
as reported, or increased 6 percent on a comparable basis. Non-U.S.
developed market revenue of $2.355 billion represented 32 percent
of company revenue and increased 7 percent as reported, or 5
percent on a comparable, constant currency basis. Emerging market
revenue of $1.102 billion represented 15 percent of company revenue
and increased 12 percent on both a reported and a comparable,
constant currency basis.
"Our results reflect a solid quarter for
Medtronic, and as we expected, a strong turnaround from the first
half of our fiscal year," said Omar Ishrak, Medtronic chairman and
chief executive officer. "We continue to execute on our broad,
sustainable growth strategy, driving therapy innovation and global
market penetration, while delivering enterprise synergies to enable
margin improvement."
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
third quarter revenue of $2.800 billion increased 10 percent, or 7
percent on a constant currency basis. CVG revenue performance was
driven by strong, mid-teens growth in CSH and mid-single digit
growth in CRHF and APV, all on a constant currency basis.
-
CRHF third quarter revenue of $1.457 billion
increased 6 percent, or 4 percent on a constant currency basis.
Arrhythmia Management grew in the low-single digits on a constant
currency basis, driven by high-teens constant currency growth in AF
Solutions, as well as strong adoption of the Micra®
Transcatheter Pacing System and TYRX® absorbable
antibacterial envelope. Heart Failure grew in the mid-single digits
on a constant currency basis, driven by strong double digit
constant currency growth in Mechanical Circulatory Support from
sales of the HVAD(TM) System, as well as continued solid demand for
the company's portfolio of quadripolar cardiac resynchronization
therapy pacemakers (CRT-P).
-
CSH third quarter revenue of $886 million
increased 18 percent, or 14 percent on a constant currency basis,
led by low-thirties constant currency growth in transcatheter
aortic valves on the strength of the CoreValve®
Evolut® PRO and U.S.
intermediate risk indication. Coronary grew in the low-double
digits on a constant currency basis, driven by strong demand for
the company's Resolute Onyx(TM) drug-eluting stent in the U.S. and
Japan.
-
APV third quarter revenue of $457 million
increased 7 percent, or 5 percent on a constant currency basis.
Aortic grew in the low-single digits on a constant currency basis,
driven by the performance of the Valiant®
Captivia® thoracic
stent graft system. Peripheral grew in the mid-single digits on a
constant currency basis, driven by double digit growth in both PTA
balloons and drug-coated balloons. High-single digit growth in
endoVenous was driven by a strong performance of the VenaSeal(TM)
closure system.
Minimally Invasive Therapies
Group
The Minimally Invasive Therapies Group (MITG) includes the Surgical
Innovations (SI) and the Respiratory, Gastrointestinal & Renal
(RGR) divisions. MITG worldwide third quarter revenue of $2.041
billion decreased 16 percent as reported, or increased 6 percent on
a comparable, constant currency basis. MITG revenue performance was
driven by high-single digit growth in SI and low-single digit
growth in RGR, both on a comparable, constant currency basis.
-
SI third quarter revenue of $1.384 billion
increased 7 percent on a comparable, constant currency basis,
driven by growth from new products in Advanced Energy and Advanced
Stapling, including LigaSure(TM) vessel sealing instruments with
nano-coating, endo stapling specialty reloads, and the Signia(TM)
powered stapler.
-
RGR third quarter revenue of $657 million
increased 3 percent on a comparable, constant currency basis. GI
and Hepatology grew in the low-double digits on a comparable,
constant currency basis, with strength across the GI therapeutics,
diagnostics, and ablation product lines. Respiratory and Patient
Monitoring grew in the low-single digits on a comparable, constant
currency basis, with strength in Nellcor(TM) pulse oximetry sensors
given the strong incidence of influenza in the U.S.
Restorative Therapies
Group
The Restorative Therapies Group (RTG) includes the Spine, Brain
Therapies, Specialty Therapies, and Pain Therapies divisions. RTG
worldwide third quarter revenue of $1.944 billion increased 7
percent, or 5 percent on a constant currency basis. Group results
were driven by low-double digit growth in Brain Therapies,
high-single digit growth in Pain Therapies, and mid-single digit
growth in Specialty Therapies, offsetting flat results in Spine,
all on a constant currency basis.
-
Spine third quarter revenue of $661 million
increased 1 percent, or was flat on a constant currency basis.
Mid-single digit constant currency growth in bone morphogenetic
protein (BMP) partially offset low-single digit declines in Core
Spine, which were consistent with the Core Spine market.
-
Brain Therapies third quarter revenue of $585
million increased 13 percent, or 10 percent on a constant currency
basis. Neurovascular grew in the high-teens on a constant currency
basis, with strength across its stroke product portfolio.
Neurosurgery grew in the low-double digits on a constant currency
basis, led by strong sales of the StealthStation® S8
surgical navigation system and O-arm®2 surgical
imaging system.
-
Specialty Therapies third quarter revenue of
$398 million increased 8 percent, or 6 percent on a constant
currency basis. High-single digit growth in Pelvic Health and ENT
was partially offset by low-single digit declines in Transformative
Solutions, all on a constant currency basis.
-
Pain Therapies third quarter revenue of $300
million increased 10 percent, or 8 percent on a constant currency
basis. The division returned to growth on the strength of the
recently launched Intellis(TM) platform for spinal cord
stimulation, as well as growth in drug pumps.
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 third quarter
revenue of $584 million increased 17 percent, or 13 percent on a
constant currency basis. The group is experiencing strong global
demand for its new sensor-augmented insulin pump systems, and has
made great progress on its ability to meet this demand, as
evidenced by the improved sequential revenue growth.
-
IIM third quarter revenue grew in the high-teens
on a constant currency basis, driven by the U.S. launch of the
MiniMed® 670G hybrid
closed loop insulin pump system with the Guardian® sensor
3 CGM. In international markets, IIM delivered low-twenties
constant currency growth on the continued strength of the
MiniMed® 640G
system.
-
DSS third quarter revenue grew in the mid-single
digits on a constant currency basis, with growth in consumables
benefitting from customer base growth and improved patient
utilization.
-
NDT third quarter revenue declined in the
mid-single digits on a constant currency basis, given the
commercial focus on the MiniMed® 670G launch
and competitive pressures.
Guidance
Medtronic today reiterated its fiscal year 2018 revenue and
non-GAAP 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 $480 million to $500 million
for the fiscal year, including an approximate $300 to $320 million
positive impact in the fourth 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 4 cents for the fiscal year, including an approximate 2
cent negative impact in the fourth fiscal quarter.
"Looking ahead, we are confident in our ability to
deliver mid-single digit constant currency revenue growth and
strong constant currency EPS leverage, this fiscal year and
beyond," said Ishrak. "We remain keenly focused on executing to
deliver dependable results as we continue to leverage our global
diversification and scale to fulfill our Mission of alleviating
pain, restoring health, and extending life for millions of people
around the world."
Webcast Information
Medtronic will host a webcast today, February 20, 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, @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 third quarter financial schedules and non-GAAP
reconciliations, click here. To view the third 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 growth rates on a comparable, constant currency
basis and adjusted net income, and diluted EPS, 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 third quarter of fiscal year
2017.
Medtronic management believes
that non-GAAP financial measures provide information useful to
investors in understanding the company's underlying operational
performance and trends and to facilitate comparisons with the
performance of other companies in the med tech industry. Non-GAAP
net income and diluted EPS 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 Third Quarter Financial Schedules &
Non-GAAP Reconciliations
View FY18 Third 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
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