Fridley, Minn.-based Medtronic posted profits of $520 million, or $1 per share, on sales of $7.06 billion for the 3 months ended Oct. 30. Compared with the same quarter last year, before the company’s $50 billion acquisition of Covidien, that represents a profit slide of -37.2% on sales growth of 61.7%. The Covidien business, now known as Medtronic’s minimally invasive therapies group, put up about a third of total sales for the just-ended quarter.
Adjusted to exclude 1-time items, profits were up 45.3% to $1.47 billion, or $1.03 per share, 3¢ ahead of the consensus forecast on Wall Street.
“Q2 was another strong quarter. Our above-market revenue growth remains robust and consistent, and, we believe, sustainable across our groups and regions,” chairman & CEO Omar Ishrak said in prepared remarks. “We are steadily executing our plan and meeting our expectations, while at the same time building a foundation for long-term, dependable revenue growth and EPS leverage.”
Medtronic boosted the low end of its guidance for fiscal 2016, saying it now expects adjusted EPS of $4.33 to $4.40, up from $4.30 to $4.40 previously. The company said it expects constant-currency sales growth to be in the upper half of its prior 4% to 6% prediction.
“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 on the promised cost synergies,” Ishrak said. “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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