Medtronic’s Q2 results top estimates despite profit slide

Medtronic (NYSE:MDT) today posted fiscal second-quarter numbers that topped the consensus forecast, despite a bottom-line slide of more than -44%, sending share prices up in pre-market trading.

The Fridley, Minn.-based company put up profits of $1.12 billion, or 82¢ per share, on sales of $7.48 billion for the three months ended Oct. 26, amounting to a -44.4% profit decline on sales growth of 6.7% compared with fiscal Q2 2018.

Adjusted to exclude one-time items, earnings per share were $1.21, 6¢ ahead of Wall Street, where analysts were looking for sales of $7.35 billion.

“This was an outstanding quarter for Medtronic. We are executing on multiple fronts, resulting in robust top-line growth, solid margin expansion, and increasing free cash flow. Yet, even more exciting than our results this quarter is the progress we are making on our new product pipeline, which is stronger than at any time in our company’s history,” chairman & CEO Omar Ishrak said in prepared remarks. “Our end markets are strong, and we are leading in most of the fastest growing markets in medical technology. Over the remainder of this fiscal year and into fiscal 2020, we expect to develop and bring to market a number of innovative new technologies, which will improve the lives of millions of people around the world, help healthcare systems become more efficient, and generate significant value for our shareholders.”

Medtronic confirmed its earnings outlook, saying it still expects to report adjusted EPS of $5.10 to $5.15, but raised its top-line guidance for organic revenue growth toto 5.0% to 5.5%, up from 4.5% to 5.0% previously.

MDT shares, which closed down -3.6% yesterday at $90.37 each, were up 1.5% to $91.69 today in pre-market trading.

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