Strong sales of medical devices in the United States helped Medtronic overcome international currency headaches and provide a strong finish in its final quarter as a U.S.-based company.
Medtronic, which is moving its legal headquarters to Dublin after acquiring Covidien, said net earnings for fiscal third quarter increased 28 percent over the same period last year, to $977 million, or 98 cents per share. Its adjusted earnings per share of $1.01 beat analysts expectations by 4 cents. Revenue increased nearly 4 percent, to $4.32 billion, also topping estimates.
Investors responded by sending Medtronic shares up nearly 4 percent, to $78.07.
"Overall, it was just a solid quarter, and very well-balanced across the business," Edward Jones analyst Jeff Windau said. "Their R & D efforts have been paying off, and they're starting to show in their sales."
Even with strong launches of products to improve and monitor patient heart beats, Medtronic's sales showed the signs of an unfavorable currency market.
International sales of Medtronic's medical devices declined by 2 percent to $1.86 billion in the quarter ended Jan. 23, as the dollar's rising value against international currencies erased $158 million in value from sales booked in other countries. Without the currency fluctuations, international sales would have grown 7 percent.
But strong sales in the United States more than made up the difference, with domestic sales of devices jumping 8 percent, to $2.46 billion. Each of Medtronic's three existing product divisions reported U.S. sales growth. In particular, analysts cheered the 15 percent domestic sales jump in Medtronic's most well-known division, heart and vascular products, which includes everything from pacemakers and defibrillators to artificial heart valves and stents.
Medtronic sold just over $1 billion worth of those devices in the United States in the quarter, partly because Americans are returning to more traditional rates of surgeries and interventional procedures following years of relative medical austerity. But all the growth wasn't from the return to traditional demand alone.
