Medtronic Earnings Fall, Sales Rise -- Update
February 21 2017 - 12:32PM
Dow Jones News
By Imani Moise
Medtronic PLC said its earnings fell in the most recent quarter
amid shrinking margins and a tough foreign currency
environment.
Sales in each of the Irish company's reportable business groups
rose during the quarter, but revenue took a $40 million hit from
foreign exchange rates.
In all for the fiscal third quarter Medtronic reported a profit
of $821 million, or 59 cents a share, down from $1.1 billion, or 77
cents, a year earlier. Excluding negative impacts from foreign
currency effects earnings rose to $1.12 from $1.06 cents.
Revenue grew 5% to $7.28 billion.
Medtronic Chief Executive Omar Ishrak said he wouldn't comment
on "the future of specific products and businesses" when asked on a
conference call about a Bloomberg report last month that the
company was preparing the sale of part or all of its
medical-supplies business for up to $5 billion.
When considering possible deals, Medtronic considers "what value
does that business provide" and "is it appropriately resourced
given Medtronic's priorities," Mr. Ishrak said.
Medtronic said its sales of diabetes therapies in the latest
quarter benefited from "strong" consumer demand for the company's
new insulin pumps. The U.S. Food and Drug Administration approved
the new pumps -- the MiniMed 630G and MiniMed 670G -- within weeks
of each other last year. Medtronic has said it wasn't expecting the
670G approval to come so quickly and won't be ready to launch the
product until this spring.
Meanwhile, the company is selling the 630G and has established a
"priority access" program allowing patients who purchase the 630G
to be first in line for the 670G when it hits the market. On the
conference call, Hooman Hakani, head of Medtronic's diabetes
business, declined to disclose the number of patients in the
priority access program but said the company is "very pleased" with
the uptake.
Analysts polled by Thomson Reuters had forecast earnings of
$1.11 on $7.22 billion in revenue.
Operating margin fell to 15.7% from 19.5%.
The company also backed its 2017 guidance.
Shares were up 1.7% at $80.26 in late-morning trading and
through Friday's close have risen 11% this year.
Jeanne Whalen contributed to this article.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
February 21, 2017 12:17 ET (17:17 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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