Medtronic Releases Second Quarter Financial Report
Dublin-headquartered medical device company Medtronic reported the financial results of its second quarter on Tuesday, November 22.
The company reported second quarter worldwide revenue of $7.345 billion, an increase of 4 percent, or 3 percent on a constant currency basis, however Medtronic CEO Omar Ishrak said that second quarter revenue was “disappointing and did not meet our expectations. We faced issues that affected our growth, including slower than expected revenue as we await new product introductions, particularly in CVG and Diabetes.”
Ishrak also said “despite this revenue shortfall, we produced a strong improvement in operating margins and double digit constant currency earnings per share growth.”
Foreign currency had a positive $50 million impact on revenue. Second quarter net income and diluted earnings per share were $1.115 billion and $0.80, increases of 114 percent and 122 percent, respectively. Second quarter non-GAAP net income and diluted EPS were $1.561 billion and $1.12, representing increases of 6 percent and 9 percent, respectively. After adjusting for the negative 6 cent impact from foreign currency, non-GAAP diluted EPS increased 15 percent.
U.S. revenue of $4.152 billion represented 57 percent of company revenue and increased 1 percent. Non-U.S. developed market revenue of $2.209 billion represented 30 percent of company revenue and increased 8 percent, or 5 percent on a constant currency basis. Emerging market revenue of $984 million represented 13 percent of company revenue and increased 8 percent, or 10 percent on a constant currency basis.
The company now expects fiscal year 2017 revenue growth to be within the mid-single digit range on a constant currency, constant weeks basis, as opposed to the upper half of the mid-single digit range signaled previously. The company expects revenue growth for the second half of fiscal year 2017 to also be in the mid-single range on a constant currency basis. While the impact from foreign currency is fluid, if current exchange rates remain similar for the remainder of the fiscal year, the company’s full year revenue would be negatively affected by approximately $20 million to $60 million, including an approximate $10 million to $30 million negative impact in the third fiscal quarter.