Q4 Revenue at Medtronic Up 5 Percent, Outlook In Line with Analysts

Andrew Klips  |

Medical technology company Medtronic, Inc. (MDT) reported its fourth-quarter and full fiscal year 2013 results Tuesday morning showing improvement in international sales that helped boost sales and profits, when not counted special items. With the news, shares have topped record highs for the price of a share set in January 2001.

For the last quarter of fiscal 2013, ended April 26, Minneapolis-based Medtronic recorded revenue of $4.46 billion, compared to $4.3 billion in the year prior quarter. As reported, the increase was 4 percent, but excluding a $48 million negative impact for currency exchange, sales increased 5 percent. Net earnings for the quarter were $969 million, or 95 cents per share, compared to $991 million, or 94 cents per share, in last year’s quarter. The higher per share amount was because of fewer shares outstanding in the recent quarter. On an adjusted basis, which excludes costs for restructuring, litigation and more, non-GAAP earnings were $1.12 billion, or $1.10 per share, versus $1.04 billion, or 99 cents per share, in Q4 fiscal 2012.

Wall Street was expecting adjusted EPS of $1.03 on revenue of $4.39 billion.

On a constant currency basis, Q4 sales and earnings in emerging markets were up by 7 percent and 14 percent, respectively.

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Sales in Medtronic’s cardiac and vascular group, which included the cardiac rhythm disease management, coronary, structural heart and endovascular businesses, increased by 5 percent (on a constant currency basis) to $2.34 billion. All of the components of the group showed growing sales, including a 7 percent leap (on a constant currency basis) in international sales to $1.34 billion.

Sales for the restorative therapies group, which include spine, neuromodulation, diabetes and surgical technologies businesses, rose by 4 percent to $2.12 billion. Sales in the surgical technologies category grew 11 percent on a constant currency basis to $407 million. Neuromodulation revenue from 7 percent on a constant currency basis to $492 million.

"These fourth quarter results were a strong finish to a solid fiscal year," said Omar Ishrak, Medtronic chairman and chief executive officer. "With our scale and breadth of innovative technology, Medtronic is clearly outperforming the market."

For all of fiscal 2013, Medtronic reported sales of $16.59 billion, up from $16.18 billion in fiscal 2012. Excluding a $328 million negative impact for currency exchange, sales were up by 5 percent. Net earnings were $3.47 billion, or $3.37 per share, down by 1 percent from last year when excluding the negative impact of currency exchange. Non-GAAP earnings were $3.86 billion, or $3.75 per share, up by 5 percent on a constant currency basis.

Looking ahead for fiscal 2014, Medtronic sees full-year sales growth between 3 percent and 4 percent on a constant currency basis. Earnings per share are projected in the range of $3.80 to $3.85. Analysts were expected EPS of $3.84 on a 3 percent increase in revenue.

Shares of MDT were up about 22 percent so far in 2013 through Monday’s close. In early Tuesday action following the earnings report, shares have galloped ahead by more than 6 percent to print new all-time highs, including a strike of $53.83.

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