Shares of medical technology firm Medtronic (MDT
94.07, +4.04, +4.5%) traded at all-time highs this morning, though have pared
gains in recent trade following the company’s first quarter beat and updated
fiscal year 2019 guidance.
Medtronic reported first quarter earnings per share of $1.17 on revenues which were essentially flat year/year on a reported basis at $7.38 bln, or an increase of 6.8% on an organic basis, which adjusts for the divestiture of its Patient Care, Deep Vein Thrombosis (Compression), and Nutritional Insufficiency businesses to Cardinal Health (CAH 51.76, +0.01, +0.0%) that occurred in the second quarter of fiscal year 2018, and a $78 mln positive impact from foreign currency.
The company’s Cardiac and Vascular Group (CVG) reported worldwide first quarter revenue of $2.811 bln, an increase of 6.2%, or 5.0 percent on a constant currency basis. CVG revenue performance was driven by strong, low-double digit growth in CSH, mid-single digit growth in APV, and low-single digit growth in CRHF, all on a constant currency basis.
Sales in the Minimally Invasive Therapies Group (MITG) were down 17.5% to $2.052 bln as reported, or increased 4.9% on a comparable, constant currency basis. MITG revenue performance included mid-single digit growth in SI and low-single digit growth in RGR, both on a comparable, constant currency basis.
The Restorative Therapies Group (RTG) saw first quarter revenue of $1.949 bln, up 7.7%, or 6.8% on a constant currency basis. Group results were driven by mid-teens growth in Brain Therapies and Pain Therapies, with low-single digit growth in Specialty Therapies and flat results in Spine, all on a constant currency basis.
Medtronic’s Diabetes Group is now organized into the Advanced Insulin Management (AIM) and Emerging Technologies divisions. Diabetes Group worldwide first quarter revenue of $572 mln increased 27.4%, or 26.3% on a constant currency basis. The group is experiencing strong global demand for its new sensor-augmented insulin pump systems.
The company also updated its fiscal year 2019 outlook. Medtronic increases its organic revenue growth guidance from a range of 4.0-4.5% to a range of 4.5-5.0%. If recent exchange rates hold for the remainder of the fiscal year, the company's fiscal year 2019 revenue would be negatively affected by approximately $420-520 mln. For fiscal year 2019, the company is increasing its implied constant currency non-GAAP diluted EPS growth forecast from a range of 8-9% to a range of 9-10%. At recent rates, foreign exchange is expected to be neutral to fiscal year 2019 EPS versus a $0.05 benefit prior. As such, despite the increased constant currency EPS growth outlook, the company is maintaining its diluted non-GAAP EPS guidance in the range of $5.10-5.15.
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