Medtronic's third-quarter sales up 5 percent, profit down

Medtronic announced Tuesday that third-quarter fiscal 2017 revenue grew 5 percent year-over-year to $7.3 billion, ahead of analyst estimates of $7.2 billion, while net income fell 25 percent to $821 million. CEO Omar Ishrak remarked "we achieved solid results across all of our business groups and geographies," adding that "we produced meaningful operating profit growth based largely on our synergy programmes" from the integration of Covidien, which Medtronic acquired in January 2015.

In the quarter, sales for Medtronic's Cardiac & Vascular Group increased 5 percent year-on-year to $2.5 billion, which included a 7 percent rise in Cardiac Rhythm & Heart Failure sales to $1.4 billion. Also in the division, Coronary & Structural Heart revenue grew 2 percent to $751 million, while Aortic & Peripheral Vascular sales lifted 6 percent to $426 million. Meanwhile, Medtronic reported that sales in the Minimally Invasive Therapies Group were up 5 percent year-over-year to $2.4 billion, with revenues from the group's Surgical Solutions division rising 6 percent to $1.3 billion and sales in the Patient Monitoring & Recovery unit 5 percent higher at $1.1 billion.

Three-month revenue from Medtronic's Restorative Therapies Group rose 4 percent year-over-year to $1.8 billion, with spine product sales up 3 percent to $657 million, while the Brain Therapies division climbed 7 percent to $518 million. Meanwhile, revenue from Specialty Therapies rose 4 percent to $370 million, with the Pain Therapies division decreasing 3 percent to $272 million. Additionally, sales in the Diabetes Group grew 6 percent year-over-year to $501 million.

On a geographic basis, quarterly revenue in the US rose 4 percent versus the year-ago period to $4.1 billion, while sales in non-US developed markets were up 6 percent to $2.2 billion. Further, emerging market revenue grew 9 percent to $984 million.

Looking ahead, Medtronic reiterated its full-year 2017 outlook, with the company expecting revenue growth in the mid-single digit range, with earnings per share of $4.55 to $4.60. Ishrak noted that "we remain confident in our ability to deliver mid-single digit constant currency revenue growth and double-digit constant currency [earnings per share] growth, not only in our current fiscal year, but also into the future."

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