Medtronic's Q2 revenue jumps 6%; spine business flat: 10 key notes

Written by Laura Dyrda | December 03, 2015 | Print  |

Medtronic reported revenue growth in the second quarter of the 2016 fiscal year.

Here are 10 key notes:


1. Medtronic reported $7 billion in worldwide revenue for the quarter, a 6 percent increase over the same period last year. The foreign currency translation had a $452 million negative impact on quarterly revenue.


2. Revenue in the United States jumped 6 percent during the quarter to $4 billion. The United States revenue represented more than half — 58 percent — of the company's overall revenue.


3. Non-United States revenue hit $2 billion, representing 29 percent of company revenue. The non-United States revenue was up 4 percent over the same period last year.


4. Emerging markets revenue topped $908 million, an 11 percent increase over the same period last year. The emerging markets represent 13 percent of company revenue.


5. The spine revenue was flat at $719 million for the quarter and declined 4 percent as reported. The United States spine revenue declined 2 percent.


6. The company's core spine business grew 6 percent outside of the United States. The U.S. core spine business underperformed, declining 4 percent. The company estimates the core spine market grew in the low-single digits.


7. Medtronic's spine business outside of the United States was up 5 percent.


8. Medtronic completed its acquisition of Covidien in January 2015, adding to the restorative therapies group. The RTG worldwide revenue hit $1.7 billion, a 5 percent increase over the same period last year.


9. For the second half of the 2016 fiscal year, Medtronic expects revenue growth in the upper-half of the mid-single digit range. However, the company does expect a negative impact from foreign currency in the second half of around $425 million to $725 million.


10. Medtronic expects fiscal year 2016 diluted non-GAAP EPS in the $4.33 to $4.40 range, including the negative foreign currency impact.


"Our integration of Covidien is going extremely well and I am particularly pleased with the way our cultures continue to come together, evidenced by our high talent retention and employee satisfaction, and how we are delivering the promised cost synergies," said CEO Omar Ishrak. "Our combination of solid constant currency revenue growth, strong leverage and increased access to cash is positioning us to create long-term, dependable value in healthcare."


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